Compute the Standard Deviation Given These Four Economic States,their Likelihoods,and

question 89

Multiple Choice

Compute the standard deviation given these four economic states,their likelihoods,and the potential returns:

• A) 12.19 percent
• B) 23.8 percent
• C) 38.65 percent
• D) 88.06 percent

---

Definitions:

Federal Reserve

The central banking system of the United States, responsible for monetary policy, regulation of the banking industry, and stability of the financial system.

Interest Rates

The cost of borrowing money or the return on invested capital, expressed as a percentage of the principal, affecting economic activity by influencing spending and saving behaviors.

Unemployment

The situation in which individuals who are capable of working and are seeking work are unable to find employment.

Marginal Propensity

The ratio of change in an economic variable (such as consumption) that occurs with a change in another variable (such as income).