Assume That the Average Annual Historical Return for Shares That

question 73

Multiple Choice

Assume that the average annual historical return for shares that comprise the Australian All Ordinaries index is 10%, and the standard deviation of returns is 20%. Based on these numbers, what is a 95% prediction interval for 2012 returns?

• A) -30%,40%
• B) -20%,40%
• C) -30%, 50%
• D) -15%,25%

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Definitions:

Business Combination

The process of merging two or more companies into one entity, usually to expand market share or diversify risk.

Hostile Takeover

An acquisition attempt by a company or investor group to obtain control of a target company against the wishes of its management and board of directors.

Premium Price

A price that is higher than the usual or standard price, often reflecting higher quality, limited availability, or additional features.

Share Exchange

A transaction where shares of one company are exchanged for shares of another, typically as part of mergers or acquisitions.