Stock Q Will Return 18 Percent in a Boom and 9

question 48

Multiple Choice

Stock Q will return 18 percent in a boom and 9 percent in a normal economy.Stock R will return 9 percent in a boom and 5 percent in a normal economy.There is a 75 percent probability the economy will be normal.What is the standard deviation of a portfolio that is invested 40 percent in stock Q and 60 percent in stock R?

• A).78%
• B)1.41%
• C)2.60%
• D)6.67%
• E)8.01%

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Definitions:

Households

Entities consisting of one or more people who live in the same dwelling and share meals or living accommodation; they may also pool their incomes.

Societal Loss

Societal Loss pertains to the broader negative impacts or costs borne by society, which can stem from various actions or policies, such as environmental degradation or public health issues.

Demand Schedule

A grid outlining the quantities of an item or service that people are ready and able to buy across a range of prices.

Marginal Cost

The uptick in aggregate cost due to the output of an extra unit of a product or service.