You Are Considering Purchasing Share S

question 27

Multiple Choice

You are considering purchasing share S.This share has an expected return of 8% if the economy booms and 3% if the economy goes into a recessionary period.The overall expected rate of return on this share will:

• A)be equal to one-half of 8% if there is a 50% chance of an economic boom.
• B)vary inversely with the growth of the economy.
• C)increase as the probability of a recession increases.
• D)be equal to 75% of 8% if there is a 75% chance of a boom economy.
• E)increase as the probability of a boom economy increases.

---

Definitions:

Electoral Votes

The number of votes a state has in the U.S. Electoral College, which ultimately decides the President and Vice-President of the United States.

Majority

The greater part or more than half of a total number, often used in the context of elections, decisions, or opinion trends within a group.

Political Action Committees

Organizations that collect funds from members or donors and contribute them to campaign funds of candidates or political parties they support, often influencing political outcomes.

Citizen Involvement

The participation and engagement of ordinary citizens in governmental or civic activities, decision making, and policy setting.