Use the Following Information,which Describes the Possible Outcomes from Investing

question 30

Multiple Choice

Use the following information,which describes the possible outcomes from investing in a particular asset,to answer the following question(s) .
State of the Economy Probability of the States Percentage Returns
Economic recession 25% 5%
Moderate economic growth 55% 10%
Strong economic growth 20% 13%
-The standard deviation of returns is

• A)8.00%.
• B)7.63%.
• C)4.68%.
• D)2.76%.

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Definitions:

Win In Trade

A situation where all parties involved in a trade feel that they have benefited from the transaction.

Lose In Trade

A situation where an individual or country experiences a decrease in welfare or potential benefit as a result of engaging in trade, often due to unfavorable terms or conditions.

International Trade

The exchange of goods and services between countries, allowing for increased efficiency and market expansion by capitalizing on comparative advantage.

Lower Opportunity Cost

A situation where choosing one option over another results in a lower forfeit of potential benefit from the other options.