Use the Table for the Question(s)below

question 88

Multiple Choice

Use the table for the question(s) below.
Consider the following expected returns,volatilities,and correlations:

-The expected return of a portfolio that is equally invested in Duke Energy and Microsoft is closest to:

• A)15%
• B)14%
• C)29%
• D)44%
• E)22%

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Definitions:

Utility Function

A mathematical model in economics that represents how different quantities of goods or services can provide satisfaction to consumers.

Income

The reward garnered over time, generally in a consistent pattern, from occupational or investment sources.

Expected Utility Function

A concept in economics that predicts the utility or satisfaction a rational individual expects to receive from different outcomes, used in decision making under uncertainty.

Sure Payment

A guaranteed payment, often referring to financial transactions where the payer is obligated to pay a certain amount.