Suppose That You Hold a Two-Asset Portfolio Consisting of 100

question 15

Multiple Choice

Suppose that you hold a two-asset portfolio consisting of 100 shares of Clooney Brothers at $33 per share and 100 shares of Marx Brothers at $42 per share.Assume that you have computed the expected return on Clooney Brothers and Marx Brothers to be 20% and 12%,respectively.What is the expected return from the portfolio?

• A) 20.0%
• B) 16.0%
• C) 15.5%
• D) 12.0%
• E) 13.5%

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Definitions:

Product Variety

Product Variety refers to the range of different products or services offered by a firm or available in a market.

Allocative Efficiency

A state of economic efficiency where resources are distributed in a way that maximizes the net benefit to society.

Monopolistic Competition

A scenario in the market characterized by numerous organizations providing products that are parallel but not the same, resulting in some level of market dominance.

Economic Inefficiencies

Situations where resources are not allocated optimally according to some criteria, leading to wasted or less effective outcomes.