What Is the Expected Return on a Portfolio That Will

question 45

Multiple Choice

What is the expected return on a portfolio that will decline in value by 13% in a recession,will increase by 16% in normal times,and will increase by 23% during boom times? Each scenario has an equal likelihood of occurrence.

• A) 8.67%
• B) 13.00%
• C) 13.43%
• D) 17.33%

---

Definitions:

Systematic Desensitization

A behavioral therapy technique used to reduce phobic responses or anxiety through gradual exposure to the feared object or situation coupled with relaxation exercises.

Counterconditioning

A behavioral therapy technique that involves teaching the patient to associate a positive response with a stimulus that previously elicited a negative response.

CS

Stands for "Conditioned Stimulus," which is a previously neutral stimulus that, after becoming associated with the unconditioned stimulus, eventually comes to trigger a conditioned response.

Intero-Exteroceptive Conditioning

a form of conditioning that involves the learning process of associating internal physiological states with external stimuli.