Consider an economy with two types of firms, S and L. S firms all move together. I firms move independently. For both types of firms, there is a 29% probability that the firms will have a 20% return and a 71% probability that the firms will have a -6% retur Plot the volatility as a function of the number of firms in the two portfolios The standard deviation of type S stock is % (Round to two decimal places.) The correct plot of the volatility of type S stock as a function of the number of firms is (Select from the drop-down monu) Graph 1 Graph 2 Consider an economy with two types of firms, S and I. S firms all move together. I firms move independently. For both types of firms, there is a 29% The standard deviation of type I stock is l_l%. (Round to two decimal places) The correct plot of the volatility of type I stock as a function of the number of firms is (Select from the drop-down menu.) Graph 1 Graph 2 180 18 OTT Q o (7 Q4 S 18.01 160- 14.0 with tw? 12.07 a 20% s, there is a the number Volatility (%) 100- 80- 60- 40- 20- 001 01 . 5 10 15 30 35 40 45 50 . 20 25 Number of firms in portfolio OK QU 18.01 16.00 140 S, there t 1201 % the num Volatility (%) 10.04 80- 60- 4.0- 20- 0.0- 0 1 - 5 10 15 30 35 40 45 50 20 25 Number of firms in the portfolio 18.0 16.0- 14.0-1 With two 20% 1204 s, there is the numbe Volatility (%) 10.0 80- 60- 40- 20- 0.04 0 1 5 10 15 35 40 45 50 20 25 30 Number of firms in portfolio OK leek 7 QY homy with tw have a 20% s, there the num Volatility (%) 18.0 16.0- 140 120- 10.04 80 60- 40- 20- 007 0 1 . 5 10 15 35 40 45 50 20 25 30 Number of firms in the portfolio OK