You Own a Portfolio Comprised of 4 Stocks and the Economy

question 57

Multiple Choice

You own a portfolio comprised of 4 stocks and the economy has 3 possible states.Assume you invest your portfolio in a manner that results in an expected rate of return of 7.5 percent,regardless of the economic state.Given this,what must be value of the portfolio's variance be?

• A) negative, but not -1
• B) -1.0
• C) 0.0
• D) 1.0
• E) positive, but not +1

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Definitions:

Cognitive Psychologists

Specialists who study mental processes including perception, thinking, memory, and problem-solving.

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A cognitive bias that involves focusing exclusively on negative details and ignoring positive ones.

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The human ability to be fully cognizant of one’s thoughts, feelings, and surroundings, enabling a sense of self and the environment.

Attention Deficit Hyperactivity Disorder (ADHD)

ADHD is a neurodevelopmental disorder characterized by problems with focus, hyperactivity, and impulsive behavior.