Consider the Following Probability Distribution for Stocks a and B

question 53

Multiple Choice

Consider the following probability distribution for stocks A and B: $$\begin{array} { c c c c } \text { State } & \text { Probability } & \text { Return on Stock A } & \text { Return on Stock B } \\1 & 0.10 & 10 \% & 8 \% \\2 & 0.20 & 13 \% & 7 \% \\3 & 0.20 & 12 \% & 6 \% \\4 & 0.30 & 14 \% & 9 \% \\5 & 0.20 & 15 \% & 8 \% \\\hline\end{array}$$ The standard deviations of stocks A and B are _____ and _____, respectively.

• A) 1.5%; 1.9%
• B) 2.5%; 1.1%
• C) 3.2%; 2.0%
• D) 1.5%; 1.1%

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Definitions:

Corporate Behaviour

The actions, attitudes, and values demonstrated by a company and its employees, which influence its reputation and culture.

Moral Expectations

Standards or beliefs regarding what is right or wrong behavior within a society or group.

Socio-Economic View

A perspective that considers the interplay between social and economic factors and how they influence each other.

Corporate Social Responsibility

A business model that helps a company be socially accountable—to itself, its stakeholders, and the public. It involves operating in ways that enhance society and the environment.