Use the Information for the Question(s)below

question 91

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 a portfolio of 20 type S firms is closest to:

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

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Definitions:

Goodwill

The intangible asset that arises as a result of the acquisition of one company by another for a premium value, representing elements like reputation, brand, intellectual property, and commercial secrets.

Routine Inquiry

Routine inquiry represents the regular and standardized requests for specific information, typically utilized in corporate and academic fields for clarity and efficiency.

Goodwill

The positive reputation and relationship a business cultivates with its stakeholders, contributing to customer loyalty and long-term success.

Cost Estimates

Predictions or approximations of the expenses associated with a project, task, or purchase, often used in budgeting and planning.