Use the Information for the Question(s)below

question 19

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 portfolio of 20 type I firms is closest to:

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

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Definitions:

Replicable

The ability of a study or experiment to be repeated and yield the same results.

Falsifiable

A criterion of the scientific method stating that for a proposition to be considered scientifically valid, it must be possible to conceive an observation that could prove the proposition false.

Psychoanalytic

Pertaining to a therapeutic and theoretical approach originated by Sigmund Freud that emphasizes unconscious motivations and conflicts in understanding human behavior.

Replicated

The process of conducting an experiment or study again to confirm the results of the original study.