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:

Separation Anxiety

A disorder characterized by excessive fear or worry about being apart from family members or individuals to whom a person is attached.

Emotional Disorder

A type of mental health disorder that primarily affects a person's emotional state and can disrupt daily functioning.

Pride

A feeling of self-satisfaction derived from achieving or possessing something highly regarded.

Shame

A complex emotion that combines feelings of dishonor, unworthiness, and embarrassment arising from the perceived judgement of others.