A Bank Is Planning to Set Up a New Branch

question 4

Multiple Choice

A bank is planning to set up a new branch.It expects the new branch to generate 20 percent of the total business of the bank after it is opened.The bank expects the returns on this branch to be 15 percent with a standard deviation of 5 percent.Currently the bank has a 12 percent rate of return with a standard deviation of 4 percent.The correlation between the bank's current returns and the returns on the new branch is expected to be 0.25.What is the bank's total expected return after adding this branch?

• A)15 percent
• B)12.6 percent
• C)12 percent
• D)14.4 percent
• E)15.5 percent

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Definitions:

Gothic Portal Sculpture

Sculptural art designed for the entranceways of Gothic cathedrals, featuring biblical figures and scenes.

Springing

The lowest stone of an arch, resting on the impost block. In Gothic vaulting, the lowest stone of a diagonal or transverse rib.

Late Gothic Flamboyant

Describes the style of Gothic architecture in the late medieval period, characterized by intricate designs, flamboyant decorative patterns, and elaborate window tracery.

Notre-Dame

A famous Gothic cathedral in Paris, celebrated for its architectural beauty, historical significance, and status as a symbol of French heritage, partially damaged by fire in 2019.