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You Own a Portfolio Comprised of 4 Stocks and the Economy

question 57

Multiple Choice

You own a portfolio comprised of 4 stocks and the economy has 3 possible states.Assume you invest your portfolio in a manner that results in an expected rate of return of 7.5 percent,regardless of the economic state.Given this,what must be value of the portfolio's variance be?


Definitions:

Selling Price Per Unit

The amount of money charged for each unit of a product or service.

Target Profit

The amount of profit that a company aims to make in a certain period.

Annual Fixed Expenses

Expenses that do not change in total over a period of one year, regardless of the level of activity within a business.

Sales Mix

The combination of different products or services that a company sells, typically analyzed to determine the most profitable mix.

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