Use the Information for the Question(s)below

question 82

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.
-The standard deviation for the return on an portfolio of 20 type S firms is closest to:

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

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Definitions:

Income

Money received on a regular basis from work, investments, business operations, or other sources, which is used to fund living expenses, savings, and investments.

Sales Taxation

A tax imposed on the sale of goods and services, which is typically collected by the seller and passed on to the government.

Model Business Corporation Act

A comprehensive statute that serves as a guideline for states in the United States to standardize and regulate the formation, operation, and dissolution of corporations.

Maximum Potential

The highest achievable or possible level of performance or success.