Assume There Is a Fixed Exchange Rate Between the Swiss

question 39

Multiple Choice

Assume there is a fixed exchange rate between the Swiss Franc and U.S. dollar. The expected return and standard deviation of return on the U.S. stock market are 14% and 11%, respectively. The expected return and standard deviation on the Swiss Stock Exchange (SIX) are 9% and 14%, respectively. The covariance of returns between the U.S. and the SIX is 1.75%.
If you invested 350% of your money in the Swiss (SIX) stock market and 65% in the U.S. stock market, the expected return on your portfolio would be

• A) 12.25%.
• B) 12.5%.
• C) 13.0%.
• D) 13.5%.

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Definitions:

Broca's Area

An area of the brain located in the frontal lobe that is involved in language processing, speech production, and comprehension.

Angular Gyrus

An area within the parietal lobe of the brain that plays a role in understanding language, numerical data, and spatial awareness.

Speak

The act of using the voice to produce words as a form of communication between individuals.

Right Hemisphere

The right hemisphere of the brain is responsible for spatial abilities, facial recognition, visual imagery, and processing music.