A Portfolio Consists of an Index Mutual Fund Which Represents

question 31

Multiple Choice

A portfolio consists of an index mutual fund which represents the overall market and Treasury bills.The fund has a portfolio weight of 60%.The risk-free rate is 3.2% and the market risk premium is 7.6%.What is your best estimate of the portfolio expected rate of return?

• A) 8.39%
• B) 7.76%
• C) 10.80%
• D) 9.02%

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Definitions:

Double Forecasting Model

A predictive analysis technique that utilizes two different forecasting methods to improve the accuracy of future predictions.

Seasonal Additive Model

An approach in forecasting that considers and adds seasonal components to predict trends and patterns.

Forecasting

The process of making predictions about future events or trends based on historical and current data analysis.

Delphi Method

An organized method of communication, initially created as a methodical, interactive prediction technique that depends on a group of specialists.