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question 19

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Use the information for the question(s) below.
Consider an economy with two types of firms,S and I.S firms always move together,but I firms move independently of each other.For both types of firm there is a 70% probability that the firm will have a 20% return and a 30% probability that the firm will have a -30% return.
-The standard deviation for the return on an portfolio of 20 type I firms is closest to:


Definitions:

Lowballing

A phenomenon in which after agreeing to an offer, people find it hard to break that commitment even if they later learn of some extra cost to the deal.

Implicit Pressure

An unspoken or indirect force that influences individuals to act or think in a certain way, often stemming from societal or cultural expectations.

Minority Opinions

Views or beliefs held by a small segment of a community or group, which can differ significantly from the majority consensus.

Informational Influence

The effect of information or knowledge from others on an individual's attitudes, opinions, or behaviors.

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