Assume the Probability of a Pessimistic, Most Likely and Optimistic

question 26

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%
• E)none of the above

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Definitions:

Interposition

A visual cue in which one object partially blocks another, helping to perceive depth and the relative position of objects.

Binocular Cues

Visual information taken in by two eyes that enable a person to gain a sense of depth and distance.

Pitch

The perceived frequency of a sound, determining whether it is high or low.

Pure Tones

Sounds with a single frequency, often used in hearing tests and research.