A Portfolio Is Expected to Return 15 Percent in a Booming

question 58

Multiple Choice

A portfolio is expected to return 15 percent in a booming economy,12 percent in a normal economy,and lose 9 percent if the economy falls into a recession.The probability of a boom is 25 percent while the probability of a recession is 15 percent.What is the overall portfolio expected return?

• A)5.42%
• B)6.83%
• C)9.60%
• D)10.05%
• E)10.81%

---

Definitions:

Domino's

A multinational pizza restaurant chain known for its wide variety of pizza options and fast delivery services.

Marketing Department

A division within a company that focuses on creating and implementing strategies to promote and sell products or services.

Environmental Forces

External factors like climate, ecological changes, and natural resources that affect an organization's operations and decision-making.

Dr. Pepper Snapple Group

An American soft drink company that manufactures, markets, and distributes non-alcoholic beverages including Dr. Pepper, 7UP, and Snapple.