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

question 20

Multiple Choice

Use the following information,which describes the possible outcomes from investing in a particular asset,to answer the following question(s) .
State of the Economy Probability of the States Percentage Returns
Economic recession 25% 5%
Moderate economic growth 55% 10%
Strong economic growth 20% 13%
-What is the expected rate of return on a portfolio Which consists of $9,000 invested in an S&P 500 Index fund,$32,500 in a technology fund,and $8,500 in Treasury Bills.The expected rate of return is 11% on the S&P Index fund,14% on the technology fund and 2% on the Treasury Bills.

• A)$154.00
• B)$142.80
• C)$65.00
• D)$15.12

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Definitions:

Vertical Analysis

A method of financial statement analysis in which each line item is listed as a percentage of a base figure within the statement.

Common Size Analysis

An analytical technique that converts each line of financial statement data to a percentage of a base amount, facilitating the comparison across different companies or periods.

Ratio Analysis

A financial analysis tool used to assess a company's performance and financial health by calculating ratios from the data in financial statements.

Inventory Turnover

Inventory turnover is a ratio showing how many times a company has sold and replaced inventory over a given period.