You Believe That the Possible Returns on Stock a Will

question 73

True/False

You believe that the possible returns on stock A will be either 25% or -15% over the coming year, depending on whether the economy does well or does poorly. Given some probabilities of the future state of the economy, you compute the standard deviation of the possible returns. To get the dispersion of the possible outcomes in the same units as the outcomes themselves (i.e., in %), you must then compute the variance.

---

Definitions:

Mislaid Property

Property that the owner has voluntarily parted with and then has inadvertently forgotten.

Title

The legal right to own, use, or dispose of property, or the formal evidence of such a right, such as a deed or certificate.

Digital Goods

Intangible products that exist in digital form, including software, digital images, music, and eBooks.

Virtual Goods

Non-tangible items that exist in digital form, often used within online communities, games, or virtual economies.