Estimated Profits for an Investor Would Depend on How Successful

question 171

Multiple Choice

Estimated profits for an investor would depend on how successful a bailout bill would be in helping the U.S.economy.The estimated annual return for two different investment strategies are shown in the following table.If there is a 30% chance that the economy will decline, 50% that there will be no change and 20% chance that it will rebound, the standard deviation associated with the investment strategy of allocating 80% to stocks and 20% to bonds is ________________________ .

• A)$1782
• B)$2245
• C)$2567
• D)$3473
• E)$4500

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