Use the Following Information to Answer the Question(s)below

question 99

Multiple Choice

Use the following information to answer the question(s) below.
Suppose that the market portfolio is equally likely to increase by 24% or decrease by 8%.Security "X" goes up on average by 29% when the market goes up and goes down by 11% when the market goes down.Security "Y" goes down on average by 16% when the market goes up and goes up by 16% when the market goes down.Security "Z" goes up on average by 4% when the market goes up and goes up by 4% when the market goes down.
-The expected return on the market portfolio is closest to:

• A)0%.
• B)4%.
• C)8%.
• D)16%.

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Definitions:

Simple Interest

Interest calculated on the principal portion of a loan or deposit, using a simple calculation that does not compound.

Monthly Basis

An occurrence or calculation that happens every month.

Round Answers

Round Answers indicates the practice of adjusting numerical answers to a specified degree of precision, often the nearest whole number, to simplify presentation or calculation.

Simple Interest

Simple interest is a calculation of interest that does not take into account the effect of compounding. Interest is applied only to the principal over a set period.