An Investment Produced Annual Rates of Return of 5%, 12

question 101

Multiple Choice

An investment produced annual rates of return of 5%, 12%, -8% and 11% respectively over the past four years. What is the (sample) standard deviation of these returns?

• A) 2.7%
• B) 3.2%
• C) 3.6%
• D) 9.2%

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Definitions:

Issuing Corporation

The company or entity that offers securities, like stocks or bonds, for sale to investors in order to raise capital.

Creditors

Individuals or entities to whom money is owed by another individual or entity, typically due to a loan or credit arrangement.

Bond Discount

The difference between the face value of a bond and its selling price, when the bond is sold for less than its face value.

Straight-Line Method

A depreciation method where an asset's cost is uniformly allocated over its useful life, resulting in equal depreciation expenses each accounting period.