Your portfolio has an expected annual return of 8.2%. What is the 2-year expected return?
A)11.6%
B)14.6%
C)16.4%
D)21.6%
E)23.2%

Question

Quizplus · Accepted Answer

To calculate the 2-year expected return, we need to compound the expected annual return for two years. This can be done using the formula: (1 + r)^n, where r is the expected annual return and n is the number of years. Plugging in the given values, we get: (1 + 0.082)^2 = 1.164 or 16.4%. Therefore, the answer is choice C, which is 16.4%.

Your Portfolio Has an Expected Annual Return of 8