An Investor Has Purchased a Mining Stock

question 103

Multiple Choice

An investor has purchased a mining stock. It is expected that during a good economy, the stock will provide an 8% return, while in a poor economy the stock will provide a 20% return. The probability
Of a poor economy is expected to be 30%. Given this information, calculate the standard deviation
For this stock.

• A) 9.1%
• B) 8.2%
• C) 7.3%
• D) 6.4%
• E) 5.5%

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Definitions:

Industry Output

The total product or service produced by companies within a specific sector or industry.

Noncooperative Behavior

Actions in a competitive environment where entities act independently without collaboration, potentially leading to less optimal outcomes.

Marginal Costs

The increase in aggregate expenses due to the production of an additional unit of a good or service.

Industry Output

The total production or supply of goods and services produced by a specific industry within a certain period.