Assume a Portfolio Has the Possibility of Returning 7 Percent,8

question 7

Multiple Choice

Assume a portfolio has the possibility of returning 7 percent,8 percent,10 percent or 12 percent with likelihood of 20 percent,30 percent 25 percent and 25 percent respectively.The expected value of the portfolio is

• A)10.0 percent
• B)9.0 percent
• C)9.3 percent
• D)9.25 percent
• E)None of the above

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Definitions:

Individual Fitness

In biology, it refers to an organism's ability to pass its genes to the next generation, often measured by reproductive success.

Situational Constraints

External factors present in the environment that limit or shape an individual's behavior or choices.

Survival

Living longer.

Theory of Evolution

A scientific explanation for the diversity of life on Earth, proposing that species change over time through processes such as natural selection.