What Is the Variance of a Portfolio Consisting of €3,500 $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad$

question 112

Multiple Choice

What is the variance of a portfolio consisting of €3,500 in share G and €6,500 in share H?
$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad$ Returns if
$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad$ State Occurs
$\begin{array}{|l|l|l|l|}\hline \text { State of Economy } & \text { Probability of State of Economy } & \text { ShareG } & \text { Share H } \\\hline \text { Boom } & 15 \% & 15 \% & 9 \% \\\hline \text { Normal } & 85 \% & 3 \% & 6 \% \\\hline\end{array}$

• A).000209
• B).000247
• C).002098
• D).037026
• E).073600

---

Definitions:

Liberal Democrat

A member of a political party or ideology that combines liberal policies on social issues with democratic principles.

Federal Deficit

The annual shortfall where the government's expenditures exceed its revenues, contributing to the national debt.

Reagan Administration

The presidential term of Ronald Reagan, the 40th President of the United States, from 1981 to 1989, known for its conservative policies and the end of the Cold War.