Use the Following Historical Average Returns and Standard Deviations to Answer

question 136

Multiple Choice

Use the following historical average returns and standard deviations to answer the question below. Based on the historical data above, what is your reward for bearing risk of owning small-company stocks rather than Canadian common stocks?

• A) 1.59%
• B) 0.80%
• C) 2.39%
• D) 1.60%
• E) 4.25%

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Definitions:

Market Imbalances

Situations where the quantity of a good or service supplied does not equal the quantity demanded, leading to surplus or shortage.

Drug Trade

The illegal production, distribution, and sale of drugs that are subject to drug prohibition laws.

Equilibrium Price

The market price at which the supply of an item equals the demand for it, leading to a stable market condition.

Black Markets

A market that operates outside the legal system in which either illegal goods are sold or legal goods are sold at illegal prices or terms.