Assume There Is a Fixed Exchange Rate Between the Canadian

question 45

Multiple Choice

Assume there is a fixed exchange rate between the Canadian and U.S.dollar.The expected return and standard deviation of return on the U.S.stock market are 13% and 15% respectively.The expected return and standard deviation of return on the Canadian stock market are 12% and 16% respectively.The covariance of returns between the U.S.and Canadian stock markets is 1.2%.If you invested 50% of your money in the Canadian stock market and 50% in the U.S.stock market,the expected return on your portfolio would be __________.

• A) 12.0%
• B) 12.5%
• C) 14.0%
• D) 15.5%

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Definitions:

Replicable Results

Results that can be consistently repeated or duplicated in scientific experimentation, ensuring reliability.

Wish Fulfillment

A concept in psychoanalytic theory referring to the satisfaction of a desire through dreaming or fantasizing.

Reinforcement

In behaviorism, a consequence that will strengthen an organism's future behavior whenever that behavior is preceded by a specific antecedent stimulus.

Falsifiable

A criterion for a theory or hypothesis that it can be proven wrong by an observation or a physical experiment.