A Security Produced Returns of 11 Percent, 7 Percent, 9

question 7

Multiple Choice

A security produced returns of 11 percent, 7 percent, 9 percent, 13 percent, and -14 percent over the past five years, respectively.Based on these five years, what is the probability that this stock will earn more than 16.16 percent in any one given year?

• A).5 percent
• B)1.0 percent
• C)2.5 percent
• D)5.0 percent
• E)16.0 percent

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Definitions:

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, expressed as a percentage of the investment's gain relative to its cost.

Minimum Required Rate

The lowest acceptable rate of return on an investment, often used in capital budgeting to assess the feasibility of projects.

Total Sales

The aggregate revenue generated from the sale of goods or services over a specific period.

Residual Income

The amount of income that an individual or company has after all personal debts and expenses, including a mortgage, have been paid.