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 61% probability that the firms will have a 8% return and a 39% probability that the firms will have a -7% return. 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 menu.) Graph 1 Graph 2 18.0 18.0- 16.0- 16.0- 14.0- 14.0- 12.0- 12.0- 10.0- 10.0- Volatility (%) Volatility (%) 8.07 8.0- 6.0- 6.0- 4.0- 4.0- 2.0 2.0- 0.07 0.071 01 01 5 45 50 - or- 45 50 10 15 20 25 30 35 40 Number of firms in portfolio 10 15 20 25 30 35 40 Number of firms in the portfolio The standard deviation of type I stock is %. (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 18.0 18.0- 16.01 16.0- 14.0- 14.0- 12.0- 12.0- 10.0- 10.0- Volatility (%) Volatility (%) 8.0- 8.0- 6.0- 6.0- 4.0- 4.0- 2.0- 2.0- o.ot 0.07 01 5 45 50 01 5 45 50 10 15 20 25 30 35 40 Number of firms in portfolio 10 15 20 25 30 35 40 Number of firms in the portfolio