Use the Information for the Question(s)below

question 2

Multiple Choice

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 individual firm is closest to:

• A)23.0%.
• B)5.25%.
• C)15.0%.
• D)10.0%.

---

Definitions:

Physical Possession

The direct, physical control or holding of an object or property by an individual or entity.

Bill of Lading

A legal document issued by a carrier to a shipper, detailing the type, quantity, and destination of the goods being transported.

Document of Title

A legal document evidencing the right to control the disposition of goods, such as a bill of lading or warehouse receipt.

Storage of Goods

The act of keeping goods in a space designated for their preservation or until they are sold or distributed.