Multiple Choice
You recently purchased a share that is expected to earn 12% in a booming economy, 8% in a normal economy and lose 5% in a recessionary economy.There is a 15% probability of a boom, a 75%
Chance of a normal economy, and a 10% chance of a recession.What is your expected rate of return
On this share?
A) 5.00%
B) 6.45%
C) 7.30%
D) 7.65%
E) 8.30%
Correct Answer:
Verified
Correct Answer:
Verified
Q92: The correlation between shares A and B
Q93: A well-diversified portfolio has negligible:<br>A)expected return.<br>B)systematic risk.<br>C)unsystematic
Q94: The principle of diversification tells us that:<br>A)concentrating
Q95: The risk-free rate of return is 4%
Q96: What is the variance of a
Q98: The primary purpose of portfolio diversification is
Q99: Unsystematic risk:<br>A)can be effectively eliminated through portfolio
Q100: What is the expected return on
Q101: Which one of the following shares
Q102: You are comparing share A to