A Stock Has an Expected Rate of Return of 7

question 286

Multiple Choice

A stock has an expected rate of return of 7.9% and a standard deviation of 6.2%. Which one of the following best describes the probability that this stock will lose more than 4.5% in any one given year?

• A) less than 0.5%
• B) less than 1.0%
• C) less than 1.5%
• D) less than 2.5%
• E) less than 5%

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Definitions:

Borne

Carried or transported by the thing specified; often used to indicate who bears the responsibility for paying costs or charges.

Chattel

Personal property that can be moved from one place to another, such as furniture or vehicles.

Intangible Personal Property

Property that does not have a physical presence but holds value, such as patents, copyrights, trademarks, and financial assets.

Substance

A fundamental or essential component of a matter; often refers to the material from which something is made.