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%.

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Definitions:

Merger Offer

A proposal by one company to combine its operations with another company's operations, usually through the acquisition of stock.

Significant Gains

Large positive changes in the financial or operational performance of a company.

Managerial Control Issues

Managerial control issues refer to challenges or problems in overseeing and directing the activities and performance of an organization or its employees.

Maximize Stock Price

It refers to strategies and measures taken by a company aimed at increasing the market value of its shares.