You Invested $3,000 in a Portfolio with an Expected Return

question 36

Multiple Choice

You invested $3,000 in a portfolio with an expected return of 10 percent and $2,000 in a portfolio with an expected return of 16 percent. What is the expected return of the combined portfolio?

• A) 6.2%
• B) 12.4%
• C) 13.0%
• D) 13.6%

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Definitions:

Variability

The extent to which data points in a statistical distribution or dataset differ from the average or mean value.

Sample Size

The number of observations or data points collected in a sample from a population.

Central Limit Theorem

A statistical theory that states that, given a sufficiently large sample size from a population with a finite level of variance, the mean of all samples from the same population will be approximately equal to the mean of the population, and the samples will be distributed approximately normally.

Normal Probability Distribution

A type of continuous probability distribution that is symmetrical around its mean, representing how random variables are distributed in many natural phenomena.