Assume a Portfolio Has the Possibility of Returning 7%, 8

question 27

Multiple Choice

Assume a portfolio has the possibility of returning 7%, 8%, 10%, or 12%, with a likelihood of 20%, 30%, 25%, and 25%, respectively. Considering the portfolio's standard deviation and expected value, would you say that this portfolio is of:

• A)average yield, low-risk.
• B)lower-than-average yield, low-risk.
• C)average yield, average risk.
• D)Not enough information to tell

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Definitions:

Purchase Price

The amount paid to acquire a good or service.

Supplier Costs

Expenses incurred for goods or services purchased from vendors, including the cost of materials, as well as any delivery or handling charges.

Economic Order Quantity

The optimal quantity of inventory to order that minimizes total inventory costs, including holding and ordering costs.

Optimum Order

The most efficient quantity of an item to order, minimizing costs and meeting demand.