Use the Information for the Question(s)below

question 3

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 U firms is closest to:

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

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Definitions:

Performance Evaluations

The systematic assessment of an employee's work performance, typically conducted on a regular basis to identify strengths and areas for improvement.

Known To The Firm

This refers to individuals, businesses, or information that is already familiar or has an established relationship with the firm.

New Knowledge

Information, understanding, and skills acquired through research, study, or experience that was previously unknown.

New Ideas

Concepts, thoughts, or observations that have not been previously considered or explored, potentially leading to innovation.