Consider an investment with the following payoffs and probabilities: State of the Economy Probability Return GDP grows slowly .70 1,000 GDP grow fast .30 2,000 Let the expected value in this example be 1,300 . How do we find the standard deviation of the investment?
a. ? = ? { (1000-1300)2 + (2000-1300)2 }
b. ? = ? { (1000-1300) + (2000-1300) }
c. ? = ? { (.5)(1000-1300)2 + (.5)(2000-1300)2 }
d. ? = ? { (.7)(1000-1300) + (.3)(2000-1300) }
e. ? = ? { (.7)(1000-1300)2 + (.3)(2000-1300)2 }
e
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Refer to the above figure. A price support set at P3 will
A) lead to a surplus of Q3 minus Q1. B) lead to a shortage of Q3 minus Q1. C) lead to an equilibrium quantity of Q2. D) be ineffective.
The market demand function for wheat is Qd = 10 - 2P and the market supply function is Qs = 4P - 2, both measured in billions of bushels per year. Suppose the government wants to increase the price of wheat to $3/bushel and they impose a price floor to achieve their goal. What is the size of the aggregate surplus?
A. $4 billion B. $8 billion C. $10 billion D. $12 billion
Research by development economists suggests that one of the key factors in raising people in low-income countries out of poverty and lowering unemployment is the establishment of ___________ wage-paying jobs.
a. high b. low c. modest d. regular
Recessions are periods of declining economic activity
a. True b. False Indicate whether the statement is true or false