Why did stalin refuse aid from the u.s.-sponsored marshall plan?
a. he thought the americans were spreading democracy and capitalism.
b. he felt the soviet union did not need assistance after world war ii.
c. he wanted to send a message of self-sufficiency to his communist allies.
d.he was looking for an excuse to start the communist information bureau.

According to the options given on the question the correct answer is option A.

He thought the Americans were spreading democracy and capitalism.

Explanation: The Marshall plan was a US funded program during 1948 to provide help to the European country after world war II, since the European countries were devastated after the war both in economy and military prospective. The plan was was announced by the secretary of state George Marshall on a speech on 1947.

However in USA, Britain and France had a meeting with the Foreign minister of Soviet Union named Molotov. He wanted to know some facts about the aid and wanted the control of the program on the hand of Soviet Union in the Europe.But the meeting was unsuccessful.

As a result Stalin refused the aid program. But beyond this external view there were some other internal reason for him to reject this aid. He thought that USA will spread democracy and capitalism in Europe through this aid program. As a result communism will be weakened in Europe and a pro American style government will be established in the European countries.Therefore, the control of Eastern Europe will be lost from Soviet Union.

So,from this fear he rejected the Marshall plan.

28%

Explanation:

If the initial wealth is given as 100 and since the initial wealth is thesame as the borrowed amount, this will be 100 as well. Then, the weight of the risk free asset will be:

= Amount invested in risk free / Initial wealth

= -100/100

= -1

Portfolio weight equals:

= 1 - (-1) = +2

Therefore, the expected return on the resulting portfolio will be:

= 2 × 16% + (-1 × 4)

= 32 - 4

= 28%