What Is the Standard Deviation of the Returns on a $30,000

question 47

Multiple Choice

What is the standard deviation of the returns on a $30,000 portfolio that consists of Stocks S and T? Stock S is valued at $18,000. $$\begin{array} { l c c } { \text { State of } } & \text { Probability of } & \text { Rate of Return } \\\text { Econony } & \text { State of Economy } & \text { if State Occurs } \\ & &\begin{array}{ll}\text { Stock S } & \text { Stock T }\end{array}\\\text { Boom } & .05& \begin{array}{ll}.11& \quad \quad .09\end{array} \\\text { Normal } & .85 & \begin{array}{ll}.08 & \quad \quad.07\end{array} \\\text { Bust } & .10&\begin{array}{ll}-.05& \quad \quad .04\end{array}\end{array}$$

Identify what constitutes cash and cash equivalents.

Recognize the direct and indirect methods of reporting cash flows from operating activities.

Comprehend the process of converting accrual basis income to cash basis.

Know the major sources of cash inflows and outflows reported in the statement of cash flows.

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Definitions:

Defective Items

Products that fail to meet quality standards or specifications and are therefore unsuitable for their intended use.

Poisson Distribution

The Poisson distribution is a probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space if these events happen with a known constant rate and independently of the time since the last event.

Variance

A measure of the dispersion or spread of a set of data points around their mean value, quantifying how much the data points differ from the average.

Poisson Problem

A statistical problem that deals with counting the number of events that occur randomly over a fixed period or in a fixed space, assuming that these events happen with a known constant mean rate and independently of the time since the last event.