Expected Return Risk Compute the Standard Deviation of the Expected

question 26

Multiple Choice

Expected Return Risk Compute the standard deviation of the expected return given these three economic states,their likelihoods,and the potential returns:

• A)8.4 percent
• B)10.87 percent
• C)11.34 percent
• D)24.09 percent

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Definitions:

Equity Method

An accounting technique used by companies to record their investments in other companies, where the investment gives the investor significant influence over the investee, but not control or full ownership.

Additional Paid-in Capital

The excess amount over the par value that shareholders pay when shares are issued, recorded in the equity section of the balance sheet.

Consolidated Earnings Per Share

A measure of a company's profitability that takes into account earnings from all of the entities it controls, presented on a per-share basis.