Stock a Is Expected to Return 12 Percent in a Normal

question 87

Multiple Choice

Stock A is expected to return 12 percent in a normal economy and lose 7 percent in a recession.Stock B is expected to return 8 percent in a normal economy and 2 percent in a recession.The probability of the economy being normal is 80 percent and the probability of a recession is 20 percent.What is the covariance of these two securities?

• A).004203
• B).004115
• C).003280
• D).003876
• E).003915

Understand the correct placement of various elements in business letters.

Recognize the structure and essential components of memos.

Understand the requirements for page numbering in formal reports.

Recognize appropriate salutations and openings in business communication.

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Definitions:

Total Revenue

The total amount of money a company receives from sales of its products or services, calculated by multiplying the price per unit by the number of units sold.

Delicatessen

A retail establishment that sells a selection of fine, unusual, or foreign prepared foods.

Constant Slope

The unchanging steepness or incline of a line on a graph, indicating a steady rate of change between two variables.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, demonstrating the sensitivity of consumers to price changes.