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

question 74

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 security "Y" is closest to:

• A)0%.
• B)4%.
• C)10%.
• D)15%.

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Definitions:

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used, hindering problem-solving.

Inner Motivation

The personal drive to do something that comes from within an individual, rather than from external pressures or rewards.

Dogmatic Thinking

An approach to understanding the world that involves strong beliefs or doctrines that are not open to question or skepticism.

Categorical Thinking

The process of organizing information by grouping similar objects, concepts, or experiences into categories or “buckets” in our minds.