Use the Information for the Question(s)below

question 19

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 portfolio of 20 type I firms is closest to:

• A)5.25%
• B)5.10%
• C)15.0%
• D)23.0%

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Definitions:

Apparent Distance Hypothesis

A theory explaining that emotions can alter the perceived distance of an object, with negative emotions making objects seem further away.

Cultural Bias Hypothesis

The theory suggesting that cognitive tests and other assessments may be biased towards the values and experiences of a specific cultural group.

Visible Spectrum

The portion of the electromagnetic spectrum that is visible to the human eye, typically encompassing wavelengths from about 380 to 740 nanometers.

Wave

A disturbance that transfers energy from one place to another without transferring matter.