There Are Three Stocks: A, B, and C If You Invested in an Equally-Weighted Portfolio of Stocks a Either

question 58

Multiple Choice

There are three stocks: A, B, and C. You can either invest in these stocks or short sell them. There are three possible states of nature for economic growth in the upcoming year (each equally likely to occur) ; economic growth may be strong, moderate, or weak. The returns for the upcoming year on stocks A, B, and C for each of these states of nature are given below: $\begin{array}{cccc}&\text { State of Nature }&\text {Moderate }&\text { Weak }\\\text { Stock } & \text { Strong Growth } & \text { Growth } & \text { Growth } \\\text { A } & 39\% & 17 \% & -5 \% \\\text { B } & 30 \% & 15 \% & 0\% \\\text { C } &6\% &14\% &22\%\end{array}$


If you invested in an equally-weighted portfolio of stocks A and C, your portfolio return would be ____________ if economic growth was strong.

• A) 17.0%
• B) 22.5%
• C) 30.0%
• D) 30.5%

Identify the limitations of functionalist theory, particularly in explaining social change.

Comprehend Locke's perspective on human nature and the necessity of government for protection.

Grasp Hobbes' views on human motivation and the pursuit of power.

Explain the concept of Verstehen and its methodological implications in sociology.

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Definitions:

Statistically Significant Difference

A measurement indicating that an observed effect or difference in a study is unlikely to have occurred by chance.

Two Independent Groups

In statistical analysis, two groups of subjects that are randomly assigned and do not influence each other.

Paired Samples T-Test

A statistical test used to compare the means of two related groups to ascertain if there is a significant difference between them.

Productivity

The efficiency at which production inputs, such as labor and capital, are turned into outputs, often measured as the ratio of output to input over a specific period.