Use the Information for the Question(s)below

question 25

Multiple Choice

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.
-The standard deviation for the return on a portfolio of 20 type S firms is closest to:

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

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Definitions:

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The lowest legal salary that employers can pay their workers, often set by government law.

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A theory suggesting that poverty creates certain cultural attitudes, behaviors, and values which perpetuate the condition of being poor across generations.

Indoctrination Explanation

Describes a theory or reasoning that attempts to explain the process of teaching a person or group to accept a set of beliefs uncritically.