1. A stock is expected to earn 27 percent in a boom economy and 13 percent in a normal economy. There is a 41 percent chance the economy will boom and a 59.0 percent chance the economy will be normal. What is the standard deviation of these returns?
6.89 Percent
7.92 Percent
8.04 Percent
8.70 Percent
2. In 1980, the United States reported $-19.4 billion in balance of trade, investment income of $30.1 billion, transfer payments of $-8.2 billion, and direct investment of $10 billion. Thus:
A) The U.S. had a current account surplus of $18.9 billion
B) The U.S. had a current account deficit of $2.5 billion
C) The U.S. had a current account surplus of $2.5 billion
D) The U.S. had a current account deficit of $12.5 billion