If the Standard Deviation of the Continuously Compounded Returns on the Asset

question 25

Multiple Choice

If the standard deviation of the continuously compounded returns on the asset is 20 percent and the interval is one half of a year, then the downside change is equal to

• A)−37.9 percent.
• B)−19.3 percent.
• C)−20.1 percent.
• D)−13.2 percent.

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Definitions:

Keynesian Approach

An economic theory proposing that government intervention through fiscal policies (spending and taxes) can affect the overall level of economic activity, stabilizing the economy.

Fiscal Policy

Government strategies used to influence economic conditions through spending and taxation.

Budget Deficits

The situation where a government's expenditures exceed its revenues, leading to the accumulation of debt.

Demand-Side Economics

Macroeconomic policy that focuses on shifting the aggregate demand curve as a way of promoting full employment and price stability