What Is the Expected Return on a Portfolio Which Is

question 57

Multiple Choice

What is the expected return on a portfolio which is invested 20% in stock A, 50% in stock B, and 30% in stock C?
$\begin{array}{llcc} \text { State of } & \text { Probability of } & \underline{\text { Returns if State Occurs }} \\\underline{ \text { Economy }} & \underline{\text { State of Economy }} & \underline{\text {Stock A\quad Stock B\quad Stock C}} \\ \text {Boom } & 20\% &18\% \quad \quad 9\%\quad \quad 6\%\\ \text { Normal} & 70\%& 11\%\quad \quad 7\%\quad \quad 9\%\\ \text { Recession } & 10\%&-10\%\quad \quad 4\%\quad \quad 13\% \\\end{array}$

• A)7.40%
• B)8.25%
• C)8.33%
• D)9.45%
• E)9.50%

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Definitions:

Evidence-Based Treatment

Treatment methods that have been scientifically tested and proven to be effective through rigorous research and clinical trials.

Binge Eating Disorder

An eating disorder characterized by recurrent episodes of eating large quantities of food very quickly and to the point of discomfort.

Bulimia Nervosa

An eating disorder characterized by binge eating followed by purging, to avoid weight gain.

Compensatory Behaviours

Actions taken to make up for or to correct a mistake, error, or deficiency, especially in the context of eating disorders to offset caloric intake.