Use the Information for the Question(s)below

question 95

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 firms 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.
-What is the expected return for an individual firm?

• A)3%
• B)5%
• C)14%
• D)-5%

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African American

A racial or ethnic group in the United States with ancestral ties to Africa.

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