Assume the Probability of a Pessimistic, Most Likely and Optimistic

question 78

Multiple Choice

Assume the probability of a pessimistic, most likely and optimistic state of nature is .25, .45 and .30, and the returns associated with those states of nature are 10%, 12%, and 16% for asset X. Based on this information, the expected return and standard deviation of return are:

• A) 12.0% and 4.0%
• B) 12.7% and 2.3%
• C) 12.7% and 4.0%
• D) 12.0% and 2.3%

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Definitions:

Minority

A group of people differentiated from the social majority based on ethnicity, race, religion, or other factors, often experiencing differential treatment or representation.

Inferiority

A feeling of being lesser in quality, value, or importance compared to others.

Hot and Cold Therapies

Treatment methods that involve the application of heat or cold to the body to reduce pain and promote healing.

Noncompliance

The failure or refusal to adhere to prescribed treatment plans, medications, or therapeutic instructions.