Stuart Company's Manager Believes That Economic Conditions During the Next

question 119

Multiple Choice

Stuart Company's manager believes that economic conditions during the next year will be strong,normal,or weak,and she thinks that the firm's returns will have the probability distribution shown below.What's the standard deviation of the estimated returns? (Hint: Use the formula for the standard deviation of a population,not a sample.) $\begin{array}{c}\begin{array}{lll} \text {Economic}\\ \underline{\text {Conditions}}\\\text {Strong}\\\text {Normal}\\\text {Weak} \end{array}\begin{array}{lll}\\\underline{\text {Prob.}}\\ 30 \% \\ 40 \% \\ 30 \% \end{array}\begin{array}{lll}\\\underline{\text {Return}}\\ 32.0 \% \\10.0 \% \\ -16.0 \% \end{array}\end{array}$

• A)17.69%
• B)18.62%
• C)19.55%
• D)20.52%
• E)21.55%

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Definitions:

Marriage

A legally and socially sanctioned union between individuals that establishes rights and obligations between them.

Money

A medium of exchange in the form of coins and banknotes; used to purchase goods and services or measure value.

Need for Achievement

A psychological drive that influences an individual to pursue and achieve goals.

Delay Gratification

The ability to resist the temptation for an immediate reward and wait for a later, often larger or more enduring reward.