Exhibit 716
Use the Information Below for the Following Problem(S)
Based

question 78

Multiple Choice

Exhibit 7.16
Use the Information Below for the Following Problem(S)
Based on the economic outlook for the industry a financial analyst covering Top Choice Corporation has determined the following three possible returns given three different states of the economy over the next period.
$$\begin{array} { c c } \text { Prabability } & \text { Return } \\\hline 0.25 & 0 .02 \\0.50 & 0.14 \\0.25 & 0.30\end{array}$$
-Refer to Exhibit 7.16.What is the standard deviation for Top Choice Corporation?

• A) 0.1%
• B) 6.3%
• C) 7.9%
• D) 9.4%
• E) 12.1%

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Definitions:

Truth-In-Lending Act

A U.S. federal law designed to protect consumers in their dealings with lenders and creditors by requiring clear disclosure of loan terms and costs.

Adjustable Rate Mortgages

A type of mortgage loan where the interest rate can change over time based on market conditions.

Truth-In-Lending Act

A federal law designed to promote informed use of consumer credit by requiring disclosures about its terms and cost.

Finance Charges

The cost associated with borrowing money, including interest and other fees, charged by lenders to borrowers.