Consider the Following Probability Distribution for Stocks a and B

question 2

Multiple Choice

Consider the following probability distribution for stocks A and B: $\begin{array}{cccc}\underline{\text { State} } & \underline{\text { Probability }} & \underline{\text { Return on Stock A } }& \underline{\text { Return on Stock B }} \\1 & 0.15 & 8 \% & 8 \% \\2 & 0.20 & 13 \% & 7 \% \\3 & 0.15 & 12 \% & 6 \% \\4 & 0.30 & 14 \% & 9 \% \\5 & 0.20 & 16 \% & 11 \%\end{array}$

-The standard deviations of stocks A and B are _____ and _____,respectively.

• A)1.56%; 1.99%
• B)2.45%; 1.66%
• C)3.22%; 2.01%
• D)1.54%; 1.11%
• E)none of the above

Recognize the role of technology and specialization in achieving economies of scale.

Identify conditions that lead to diseconomies of scale.

Explore how business strategies like mergers can create value through economies of scope.

Understand the impact of learning curves on production costs.

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Definitions:

Pancreas

A glandular organ located in the abdomen that plays a crucial role in digestion and insulin production.

Endocrine Glands

Glands in the body that release hormones directly into the bloodstream to regulate various bodily functions.

Sympathetic Nervous System

Part of the autonomic nervous system that activates the body's fight-or-flight response during perceived threats.

Stress

A physical, mental, or emotional factor that causes bodily or mental tension and may be a factor in disease causation.