Which one of the following statements must be true?

Multiple Choice

• The total of the probabilities of the economic states can vary between zero and 100 percent.

• All securities are projected to have higher rates of return when the economy booms versus when it is normal.

• Considering the possible states of the economy emphasizes the fact that multiple outcomes can be realized from an investment.

• The highest probability of occurrence must be placed on a normal economy versus either a boom or a recession.

• Various economic states affect a portfolio's expected return but not the expected level of risk.