-What Is Bank B's Standard Deviation of Its Asset Allocation

question 2

Multiple Choice

$$\begin{array} { l l l l } & \text { National Banks } & \text { Bank A } & \text { Bank B } \\\text { Real Estate Loans } & 60 \text { percent } & 30 \text { percent } & 56 \text { percent } \\\text { Consumer Loans } & 20 \text { percent } & 30 \text { percent } & 28 \text { percent } \\\text { Commercial Loans } & 20 \text { percent } & 10 \text { percent } & 16 \text { percent }\end{array}$$
-What is Bank B's standard deviation of its asset allocation proportions relative to the national banks average? Use the formula in the textbook.

• A)14.16 percent.
• B)33.33 percent.
• C)5.66 percent.
• D)3.00 percent.
• E)1.50 percent.

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Definitions:

Real Assets

Physical or tangible assets such as property, commodities, and natural resources that have intrinsic value.

Net Income

Net income refers to the total profit of a company after all expenses, taxes, and costs have been subtracted from its total revenue.

Financial Asset

Any asset that is cash, an ownership interest in an entity, or a contractual right to receive or deliver cash or another financial instrument.

Pension Reserves

Funds that are set aside by a corporation or government to support its future pension obligations to its employees.