Consider the Following Probability Distribution for Stocks a and B

question 36

Multiple Choice

Consider the following probability distribution for stocks A and B: $\begin{array}{cccc}\text { State } & \text { Probability } & \text { Return on Stock A}&\text { Return on Stock E } \\ 1 & 0.10 & 10 \% & 8 \% \\2 & 0.20 & 138 & 78 \\3 & 0.20 & 128 & 68 \\4 & 0.30 & 148 & 98 \\5 & 0.20 & 158 & 8 \%\end{array}$
The standard deviations of stocks A and B are _____ and _____, respectively.

• A) 1.5%; 1.9%
• B) 2.5%; 1.1%
• C) 3.2%; 2.0%
• D) 1.5%; 1.1%

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Definitions:

Marginal Cost (MC)

An upsurge in the cumulative cost incurred from the production of one more unit of a product or service.

Marginal Benefit

The boost in satisfaction or utility experienced by a consumer when they consume an additional unit of a specific good or service.

Total Benefit

The complete gain or advantage that an individual, entity, or society receives from consuming a good or service.

Football Games

Competitive sporting events involving two teams aiming to score points by moving a ball into the opposing team's end area, primarily through kicking, carrying, or passing.