Use the Following Information to Answer the Question(s)below

question 45

Multiple Choice

Use the following information to answer the question(s) below.
Assume that the economy has three types of people.20% are fad followers,75% are passive investors,and 5% are informed traders.The portfolio consisting of all informed traders has a beta of 1.4 and an expected return of 16%.The market has an expected return of 10% and the risk-free rate is 4%.
-The expected return for the fad follower's portfolio is closest to:

• A)11.5%.
• B)12.4%.
• C)13.6%.
• D)16.0%.

Interpret survey data to determine probabilities involving overlapping sets.

Calculate the probability of an event occurring given the probability of two or more other interrelated events.

Understand concepts of intersection and union in the context of probability.

Apply the concept of conditional probability to determine specific probabilities.

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