Use the Following Information,which Describes the Possible Outcomes from Investing

question 22

Multiple Choice

Use the following information,which describes the possible outcomes from investing in a particular asset,to answer the following question(s) .

-What is the expected rate of return for an investment that has the following expected scenario? If there is an 18% probability of a recession,2.0% return;if there is a 65% probability of a moderate economy,9.5% return;if there is a 17% probability of a strong economy,14.2% return.

• A)11.25%
• B)7.33%
• C)8.95%
• D)9.59%

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Definitions:

Productive

The ability to produce a substantial amount of goods or services, or doing so efficiently.

Wage Differentials

Wage differentials are the variations in wage rates due to the differences in occupation, industry, geographic location, or within a company, among other factors.

College Graduates

People who have finished their studies and earned a degree from a higher education institution.

Labor Supply Curve

The labor supply curve illustrates the relationship between the wage rate and the quantity of labor that workers are willing to offer at different wage rates.