Compute the Expected Return and Standard Deviation Given These Four

question 9

Multiple Choice

Compute the expected return and standard deviation given these four economic states, their likelihoods, and the potential returns: Economic State
Probability
Return
Fast Growth
0) 20
60%
Slow Growth
0) 50
13%
Recession
0) 15
-15%
Depression
0) 15
-45%

• A)9.5 percent; 32.43 percent
• B)9.5 percent; 21.96 percent
• C)9.5 percent; 18.97 percent
• D)9.5 percent; 29.18 percent

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Definitions:

Internal Control

Procedures and processes implemented by a company to safeguard its assets, ensure accurate financial reporting, and promote operational efficiency.

Financial Statements

Reports that summarize the financial condition and operations of a business, including balance sheet, income statement, and cash flow statement.

FIFO

First-In, First-Out, an accounting method for managing inventory and financial matters where the oldest inventory items are sold or used first.

Inventory Costing

A method used to assign costs to inventory items and determine the cost of goods sold during a period.