Standard Deviation: View Point Industries Has Forecast a Rate of Return

question 43

Multiple Choice

Standard Deviation: View Point Industries has forecast a rate of return of 20.00% if the economy booms (25.00% probability) ; a rate of return of 15.00% if the economy in in a growth phase (45.00% probability) ; a rate of return of 2.50% if the economy in in decline (20.00% probability) ; and a rate of return of -15.00% if the economy in a depression (10.00% probability) . What is View Point's standard deviation of returns?

• A) 17.31%
• B) 9.25%
• C) 15.00%
• D) 10.46%

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Definitions:

Unlimited Liability

A legal structure in which the owners of a business are personally responsible for all the debts and obligations of the business, without any limit.

Legal Requirements

Regulations or obligations imposed by law that organizations or individuals must follow.

Governmental Regulation

The laws, rules, and regulations established by government bodies to control activities within various sectors and protect public interests.

Capital Contributions

The money, property, or other assets that an owner or shareholder provides to a business either initially or to support ongoing operations.