Given the Following Probability Distribution, What Is the Expected Return

question 54

Multiple Choice

Given the following probability distribution, what is the expected return and the standard deviation of returns for Security J?

• A) 15%; 6.50%
• B) 12%; 5.18%
• C) 15%; 3.16%
• D) 15%; 10.00%
• E) 20%; 5.00%

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Definitions:

Pharmaceutical Industry

The sector of the economy that discovers, develops, produces, and markets drugs or pharmaceutical products for use as medications.

Marginal Cost

The augmentation in complete expenditure resulting from the manufacture of one more unit of a good or service.

Economies Of Scale

The cost advantages that enterprises obtain due to scale of operation, with cost per unit of output generally decreasing with increasing scale.

Law Of Diminishing Returns

An economic principle stating that adding more of one factor of production, while holding others constant, will at a certain point yield lower incremental per-unit returns.