Use the Information for the Question(s)below

question 67

Essay

Use the information for the question(s)below.
Consider an economy with two types of firms, S and U. The S firms always move together, but U 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.
-What care, if any, should be taken when selecting shares for an investment portfolio?
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Definitions:

Profitable New Products

Goods or services recently introduced to the market that generate earnings exceeding their cost of production.

Larger Organisation

An organization that is significant in size, possibly with multiple departments, a wide range of functions, and a large number of employees.

Minority Owned Business

A business that is at least 51% owned, operated, and controlled by individuals belonging to a racial or ethnic minority group.

Diversity

Describes race, gender, age, and other individual differences.