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Question 4 Calculate the expected return of a portfolio assuming an equal weight in shares and bonds. A) 4.74% B) 4.1% C) 4.53% D) 4.79%

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Question 4 Calculate the expected return of a portfolio assuming an equal weight in shares and bonds. A) 4.74% B) 4.1% C) 4.53% D) 4.79% E) 4.17% Correct answer is D. You have been provided with the below information related to potential returns on bonds and shares under different economic conditions. Scenario Return.on.Bonds Boom Positive Growth Normal Growth Negative Growth Recession Probability 6% 17% 43% 20% 10% Return.on.Shares 44% 17% 4% 2% -8% -17% 9% 6% 4% 1% 0% -2% Crash 4%

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