Stock a Has an Expected Return of 20%, and Stock

question 65

Multiple Choice

Stock A has an expected return of 20%, and stock B has an expected return of 4%.However, the risk of stock A as measured by its variance is 3 times that of stock B.If the two stocks are combined equally in a portfolio, what would be the portfolio's expected return?

• A)4%
• B)12%
• C)20%
• D)Greater than 20%
• E)Need more information to answer.

Recognize the role of digital elements in web resumes.

Learn techniques to optimize resumes for electronic scanning.

Understand how to make a resume visually appealing and readable.

Comprehend the use and structure of a functional resume.

---

Definitions:

Simultaneous Pricing Game

A strategic interaction in economics where multiple firms set their prices at the same time, taking into consideration the potential reactions of competitors.

Trigger Strategy

A long-term tactic in game theory where a player's future actions are conditional on other players' actions, commonly used to enforce cooperation or punish non-cooperation.

Equilibrium Efficiency

The optimal allocation of resources in a market where supply and demand are balanced, leading to the best possible outcome for both producers and consumers.

Utility

A measure of the satisfaction or benefit that consumers derive from consuming goods or services.