Table 8.2 You Are Going to Invest $20,000 in a Portfolio Consisting

question 76

Multiple Choice

Table 8.2
You are going to invest $20,000 in a portfolio consisting of assets X, Y, and Z, as follows:
-What is the expected market return if the expected return on asset X is 20 percent, its beta is 1.5, and the risk free rate is 5 percent?

• A) 5.0%
• B) 7.5%
• C) 15.0%
• D) 22.5%

---

Definitions:

Anticipated Inflation

The rate of inflation that consumers, businesses, and investors expect to occur in the future.

Congressional Appropriations

The legal process by which the United States Congress allocates federal funds to various government agencies, departments, and programs.

Board of Governors

refers to the leading body or group of individuals overseeing the operations and policy-making of an organization, such as a central bank.

Monetary Policy

The macroeconomic policy laid down by the central bank involving management of money supply and interest rate to control inflation, consumption, growth, and liquidity.