Assume There Is a Fixed Exchange Rate Between the Canadian

question 16

Multiple Choice

Assume there is a fixed exchange rate between the Canadian and U. S. dollar. The expected return and standard deviation of return on the U. S. stock market are 18% and 15%, respectively. The expected return and standard deviation on the Canadian stock market are 13% and 20%, respectively. The covariance of returns between the U. S. and Canadian stock markets is 1.5%.
-If you invested 50% of your money in the Canadian stock market and 50% in the U.S.stock market,the expected return on your portfolio would be __________.

• A)12.0%
• B)12.5%
• C)13.0%
• D)15.5%
• E)none of the above

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Definitions:

Society's Perspective

The collective viewpoints, interests, and priorities of a community or population regarding various issues or policies.

Marginal Benefit

The extra utility or satisfaction garnered by consuming one more unit of a good or service.

Marginal Cost

The amount spent on generating an extra unit of a product or service.

Optimal Amount

The most efficient, effective or desirable quantity or level.