Compute the Expected Return and Standard Deviation Given These Four

question 4

Multiple Choice

Compute the expected return and standard deviation given these four economic states, their likelihoods, and the potential returns:
$$\begin{array}{l}\begin{array} { c c r } \text { Eccrorric State }&\text { Probability } & \text { Return } \\\text { fast growth }&0.20 & 60\% \\\text {slow growth }&0.50 & 13\% \\\text { recession }&0.15 & - 45\%\\\text { depression }&0.15 & - 45\%\\\end{array}\end{array}$$

• A) 9.5 percent; 32.43 percent
• B) 9.5 percent; 21.96 percent
• C) 9.5 percent; 18.97 percent
• D) 9.5 percent; 29.18 percent

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Definitions:

Price Discount

A reduction from the original or listed price of a product or service, typically offered to stimulate sales or clear inventory.

Robinson-Patman Act

A United States federal law aimed at preventing anticompetitive practices by producers, specifically price discrimination.

Antitrust Laws

Legislation designed to prevent monopolies and promote competition among businesses, ensuring fair market practices.

Anti-Chain-Store Act

Legislation aimed at limiting or regulating the expansion and operation of chain stores to protect local businesses and maintain market competition.