Consider the Following Portfolio of Assets What Is the Expected Return on the Portfolio (Round to |

question 21

Multiple Choice

Consider the following portfolio of assets: $$\begin{array} { | c | c | c | c | c | c | } \hline \text { Loan } i & \text { Weight } i & \text { Expected return } i & \sigma & \sigma ^ { 2 } & \\\hline 1 & 0.45 & 15 \% & 6.05 \% & 36.60 \% & \mathrm { P } _ { 12 } = - 0.2 \\\hline 2 & 0.55 & 13 \% & 8.75 \% & 76.56 \% & \sigma _ { 12 } = - 4.0 \% \\\hline\end{array}$$ What is the expected return on the portfolio (round to two decimals) ?

• A)(15% + 13%) / 2 = 14.00%
• B)(0.45)²(15%) + (0.7)²(13%) = 9.41%
• C)[(0.45)²(15%) + (0.7)²(13%)] * 2 = 18.82%
• D)0.45(15%) + 0.7(13%) = 15.85%

Understand key principles and benefits of effective performance management.

Identify the purposes of performance feedback and its impact on leadership and employee development.

Recognize various methods for measuring performance and their applications.

Analyze the criteria for determining the effectiveness of performance measures, including validity, reliability, and specificity.

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Definitions:

Liability

A financial obligation or amount owed by a business or individual, arising from past transactions or events.

Asset

An item of value owned by an individual or corporation, expected to provide future benefits or value.

Stockholders' Equity

Stockholders' Equity represents the ownership interest of shareholders in the net assets of a company, calculated as the difference between total assets and total liabilities.

Revenues

Revenues represent the income earned by a business from its normal operations, such as sales of goods or services, before any expenses are deducted.