Exhibit 1-4
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 52

Multiple Choice

Exhibit 1-4
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
You have concluded that next year the following relationships are possible: $\begin{array}{llc}\text { Economic Status } & \text { Probability } & \text { Rate of Return } \\\hline \text { Weak Economy } & .15 & -5 \% \\\text { Static Economy } & .60 & 5 \% \\\text { Strong Economy } & .25 & 15 \%\end{array}$
-Refer to Exhibit 1-4. What is your expected rate of return [E(Ri) ] for next year?

• A) 4.25%
• B) 6.00%
• C) 6.25%
• D) 7.75%
• E) 8.00%

---

Definitions:

Current Beliefs

Refers to the present beliefs or opinions that an individual or group holds, which can influence behavior and attitudes.

Flashbulb Memory

A highly detailed and vivid memory of an emotionally significant moment or event.

Semantic Memory

A type of long-term memory that involves the storage of general knowledge and facts about the world.

Retroactive Interference

is a phenomenon where newly acquired information interferes with and hampers the recall of previously acquired information.