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%

Recognize the importance and applications of economic analysis for consumers and society.

Understand the concept of "there is no free lunch" in economics.

Grasp the basic principles of macroeconomic analysis and its focus areas.

Learn how to analyze economic activities using marginal benefit and marginal cost.

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Definitions:

Total Return

The overall financial gain or loss on an investment over a specific period, including dividends, interest, and capital gains.

Market

The collective system of buying, selling, and trading goods, services, or financial instruments among buyers, sellers, and intermediaries.

Discounted

Discounted involves adjusting the value of future cash flows to their present value using a specific interest rate, to account for time and risk.

Beta

A measure of the volatility, or systematic risk, of a security or portfolio in comparison to the market as a whole.