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

question 2

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 rate is closest to:

• A) 0%
• B) 4%
• C) 8%
• D) 16%

---

Definitions:

Qualified Day Care Center

A child care facility that meets specific criteria set by tax law, potentially eligible for certain tax benefits.

American Opportunity Tax

An educational credit for sanctioned expenses related to an eligible student’s initial four years at a higher education institution.

Lifetime Learning Credits

A tax credit available to individuals who pay qualified tuition and related expenses, aimed to encourage lifelong learning and skill development.

Earned Income Credit

A refundable tax credit for low- to moderate-income working individuals and families.