Consider a Portfolio That Consists of an Equal Investment in 20

question 26

Multiple Choice

Consider a portfolio that consists of an equal investment in 20 firms.For each of these firms,there is a 70% probability that the firms will have a 16% return and a 30% probability that they will have a -8% return.Each of these firms' returns is independent of all others.The standard deviation of this portfolio is closest to:

• A)2.5%.
• B)4.2%.
• C)8.8%.
• D)11.0%.

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Definitions:

Livable

A characteristic of an environment or city that makes it suitable for living, considering factors like safety, affordability, employment opportunities, and quality of life.

U.S. Armed Forces

The military forces of the United States, consisting of the Army, Navy, Marine Corps, Air Force, and Coast Guard, responsible for defending the country against external threats and providing aid during national emergencies.

1945

The year 1945 marked the end of World War II, following the unconditional surrender of Nazi Germany in May and culminating with the surrender of Japan in September.

12 Million

This number is often cited in historical contexts, such as the estimated number of African slaves transported to the New World during the Atlantic slave trade.