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:

Political Party

An organized group of people with at least roughly similar political aims and opinions, that seeks to influence public policy by getting its candidates elected to public office.

Bread-and-Butter

Refers to basic, essential aspects of something, often related to source of income or fundamental needs.

Collective Bargaining

The process in which working people, through their unions, negotiate contracts with their employers to determine their terms of employment.

Grievance Procedure

Formal procedure that provides for the union to represent members and nonmembers in processing a grievance.