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D. Compute tne stanaara aeviation Tor tne corporate Dona Tuna ana Tor tne common stOCK Tuna. The standard deviation for the corporate bond fund is. (Round to two decimal places as needed.) The standard deviation for the common stock fund is (Round to two decimal places as needed.) c. Would you invest in the corporate bond fund or the common stock fund? Explain. V that for the corporate bond fund, the common stock fund V fund should be chosen. Since the standard deviation for the common stock fund is Based on the expected value, the V the risk when making a decision. V the corporate bond fund and an investor d. If you chose to invest in the common stock fund in (c), what do you think about the possibility of losing $990 of every $1,000 invested if there is an extreme recession? O A. If you chose the common stock fund, you would need to assess your reaction to the high possibility that you could lose 50% of your entire investment. O B. If you chose the common stock fund, you would need to assess your reaction to the high possibility that you could lose virtually all of your entire investment. O C. If you chose the common stock fund, you would need to assess your reaction to the small possibility that you could lose 50% of your entire investment. O D. If you chose the common stock fund, you would need to assess your reaction to the small possibility that you could lose virtually all of your entire investment.

D. Compute tne stanaara aeviation Tor tne corporate Dona Tuna ana Tor tne common stOCK Tuna. The standard deviation for the corporate bond fund is. (Round to two decimal places as needed.) The standard deviation for the common stock fund is (Round to two decimal places as needed.) c. Would you invest in the corporate bond fund or the common stock fund? Explain. V that for the corporate bond fund, the common stock fund V fund should be chosen. Since the standard deviation for the common stock fund is Based on the expected value, the V the risk when making a decision. V the corporate bond fund and an investor d. If you chose to invest in the common stock fund in (c), what do you think about the possibility of losing $990 of every $1,000 invested if there is an extreme recession? O A. If you chose the common stock fund, you would need to assess your reaction to the high possibility that you could lose 50% of your entire investment. O B. If you chose the common stock fund, you would need to assess your reaction to the high possibility that you could lose virtually all of your entire investment. O C. If you chose the common stock fund, you would need to assess your reaction to the small possibility that you could lose 50% of your entire investment. O D. If you chose the common stock fund, you would need to assess your reaction to the small possibility that you could lose virtually all of your entire investment.

Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
Section10.8: Probability
Problem 68E
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You plan to invest $1,000 in a corporate bond fund or in a common stock fund. The information to the right about the annual return (per $1,000) of each of these investments under different econonic conditions is available, along with the probability that each of these economic conditions will occur. Complete parts (a) through (d) below. Economic Probability Condition 0.01 0.09 Corporate Common Bond Fund Stock Fund <-300 Extreme recession 066- 350 Recession -40 0.20 Stagnation Slow growth Moderate growth High growth 30 - 50 0.25 70 50 0.30 80 150 350 0.15 90 D. Compute the standara deviation Tor ne corporate Dona Tuna ana Tor tne common STOCK Tuna. The standard deviation for the corporate bond fund is (Round to two decimal places as needed.) The standard deviation for the common stock fund is . (Round to two decimal places as needed.) c. Would you invest in the corporate bond fund or the common stock fund? Explain. V that for the corporate bond fund, the common stock fund V fund should be chosen. Since the standard deviation for the common stock fund is Based on the expected value, the the risk when making a decision. the corporate bond fund and an investor d. If you chose to invest in the common stock fund in (c), what do you think about the possibility of losing $990 of every $1,000 invested if there is an extreme recession? O A. If you chose the common stock fund, you would need to assess your reaction to the high possibility that you could lose 50% of your entire investmer O B. If you chose the common stock fund, you would need to assess your reaction to the high possibility that you could lose virtually all of your entire investment. O C. If you chose the common stock fund, you would need to assess your reaction to the small possibility that you could lose 50% of your entire investment. O D. If you chose the common stock fund, you would need to assess your reaction to the small possibility that you could lose virtually all of your entire investment.
Transcribed Image Text:You plan to invest $1,000 in a corporate bond fund or in a common stock fund. The information to the right about the annual return (per $1,000) of each of these investments under different econonic conditions is available, along with the probability that each of these economic conditions will occur. Complete parts (a) through (d) below. Economic Probability Condition 0.01 0.09 Corporate Common Bond Fund Stock Fund <-300 Extreme recession 066- 350 Recession -40 0.20 Stagnation Slow growth Moderate growth High growth 30 - 50 0.25 70 50 0.30 80 150 350 0.15 90 D. Compute the standara deviation Tor ne corporate Dona Tuna ana Tor tne common STOCK Tuna. The standard deviation for the corporate bond fund is (Round to two decimal places as needed.) The standard deviation for the common stock fund is . (Round to two decimal places as needed.) c. Would you invest in the corporate bond fund or the common stock fund? Explain. V that for the corporate bond fund, the common stock fund V fund should be chosen. Since the standard deviation for the common stock fund is Based on the expected value, the the risk when making a decision. the corporate bond fund and an investor d. If you chose to invest in the common stock fund in (c), what do you think about the possibility of losing $990 of every $1,000 invested if there is an extreme recession? O A. If you chose the common stock fund, you would need to assess your reaction to the high possibility that you could lose 50% of your entire investmer O B. If you chose the common stock fund, you would need to assess your reaction to the high possibility that you could lose virtually all of your entire investment. O C. If you chose the common stock fund, you would need to assess your reaction to the small possibility that you could lose 50% of your entire investment. O D. If you chose the common stock fund, you would need to assess your reaction to the small possibility that you could lose virtually all of your entire investment.
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