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

question 87

Multiple Choice

Use the following information to answer the question(s) below.
Suppose that all stocks can be grouped into two mutually exclusive portfolios (with each stock appearing in only one portfolio) : growth stocks and value stocks.Assume that these two portfolios are equal in size (market value) ,the correlation of their returns is equal to 0.6,and the portfolios have the following characteristics: The risk-free rate is 3.5%.
-The expected return on the market portfolio (which is a 50-50 combination of the value and growth portfolios) is closest to:

• A)12.0%.
• B)13.5%.
• C)15.0%.
• D)19.0%.

---

Definitions:

High Achievers

Persons or entities that consistently exceed standard expectations and goals within their field or activity.

Routine Tasks

Repetitive and predictable tasks that require a standard set of procedures and can be performed with minimal variation.

Motivator Factors

Elements of a job or work environment that can significantly increase employee satisfaction and motivation.

Herzberg's Model

A theory of motivation that distinguishes between hygiene factors (which prevent dissatisfaction) and motivators (which promote job satisfaction and motivation).