Use the following table:
States of the Economy Probability of the State 3-Month
T-Bill Large-Company Stock Small-Company Stock
Boom 0.3 4 10 30
Steady 0.5 4 5 20
Recession 0.2 4 0 10
What is the difference between the standard deviation of a small-company stock and a 3-month T-bill?
A) 7.0%
B) 5.5%
C) 4.0%
D) 3.5%
Answer: A
Explanation: A) 7% - 0% = 7%.
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Which of the following statements is true about innovations and entrepreneurship?
A. A command economy creates greater incentives for innovation and entrepreneurship than a market economy. B. If a country's economy is to sustain long-run economic growth, the business environment must restrict entrepreneurial activity. C. A high level of entrepreneurial activity leads to a low level of innovation. D. Innovations in production and business processes lead to an increase in the productivity of labor and capital. E. Strong legal protection of property rights creates an unfavorable environment for innovation and entrepreneurship.
Which of the following is not a factor generally necessary for applying market share theory?
A) All defendants intended to cause the plaintiff harm. B) All defendants are tortfeasors. C) The allegedly harmful products are identical and share the same defective qualities. D) The plaintiff is unable, through no fault of his or her own, to identify which defendant caused his or her injury.