You Own a Portfolio with the Following Expected Returns Given

question 83

Multiple Choice

You own a portfolio with the following expected returns given the various states of the economy.What is the overall portfolio expected return?
$\begin{array}{|l|l|l|}\hline \text { State of Economy } & \text { Probability of State of Economy } & \text { Rate of Return if StateOccurs } \\\hline \text { Boom } & 15 \% & 18 \% \\\hline \text { Normal } & 60 \% & 11 \% \\\hline \text { Recession } & 25 \% & -10 \% \\\hline\end{array}$

• A)6.3%
• B)6.8%
• C)7.6%
• D)10.0%
• E)10.8%

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Definitions:

Allopatric Speciation

Speciation that occurs when one population becomes geographically separated from the rest of the species and subsequently evolves. Compare with sympatric speciation.

Geographic Isolation

A form of evolutionary separation where populations of the same species become physically divided by geographical barriers leading to genetic divergence.

Adaptive Radiation

The evolution of a large number of related species from an unspecialized ancestral organism.

Kaibab Squirrels

A species of squirrel that is native to the North Rim of the Grand Canyon in the United States, known for its distinctive tufted ears.