Consider the Following Probability Distribution for Stocks C and D

question 51

Multiple Choice

Consider the following probability distribution for stocks C and D: $\begin{array}{cccc}\text { State } & \text { Probability } & \text { Return on Stock C} & \text { Return on Stock D } \\1 & 0.30 & 7\% & -9\% \\2 & 0.50 & 11\% & 14\% \\3 & 0.20 & -16\% & 26\%\end{array}$

The standard deviations of stocks C and D are _____ and _____, respectively.

• A) 7.62%; 11.24%
• B) 11.24%; 7.62%
• C) 10.35%; 12.93%
• D) 12.93%; 10.35%

---

Definitions:

Forward-Looking Forecasts

Predictive statements or projections about future events, typically concerning a company's revenues, earnings, or growth prospects.

Securities Fraud

Illegal practices involving the manipulation or misrepresentation of information related to investments, intended to deceive investors.

Misrepresenting Facts

The act of presenting false or misleading information intentionally or unintentionally, often to gain advantage or mislead others.

Puffery

Exaggerated or boasting statements made by sellers about the quality or performance of a product, generally considered legal and not actionable as fraud.