Consider the Following Information on a Portfolio of Three Stocks

question 71

Multiple Choice

Consider the following information on a portfolio of three stocks: The portfolio is invested 35 percent in each Stock A and Stock B and 30 percent in Stock C.If the expected T-bill rate is 3.90 percent,what is the expected risk premium on the portfolio?

• A)6.19 percent
• B)6.90 percent
• C)7.38 percent
• D)7.72 percent
• E)8.68 percent

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Definitions:

Innate Categories

Fundamental classifications or concepts that are presumed to be naturally pre-existing in the human mind.

Kant's View

Refers to the philosophical perspectives of Immanuel Kant, emphasizing critical reasoning, ethics, and the limits of human knowledge.

British Empiricists

Philosophers from Britain who emphasized the importance of sensory experience as the foundation of knowledge.

Transduction

The process of converting one form of energy into another, as in sensory organs transforming physical stimuli into nerve signals.