The Following Table Details an Analyst's Prediction of the Probabilities

question 10

Multiple Choice

The following table details an analyst's prediction of the probabilities of different states of the market over the next year,along with the forecast returns on security Alpha-a share of a company in a cyclical industry in each different market state.
What is the expected return and standard deviation of returns on security Alpha?

• A)8.50% and 9.09%
• B)8.20% and 4.26%
• C)7.80% and 9.09%
• D)8.50% and 0.83%
• E)6.52% and 8.26%

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Definitions:

GNP

Gross National Product, a measure of a country's economic performance, accounting for the total value of all goods and services produced over a specific time period.

Domestically Owned Producers

Companies or industries that are owned, controlled, and operated within one's own country.

Exports

Goods or services sent from one country to another for sale, contributing to the national income of the exporting nation.

Exports

Goods or services produced in one country and sold to buyers in another.