A Stock Had Returns of 10%, 2%, 8%, 17%, and -

question 31

Multiple Choice

A stock had returns of 10%, 2%, 8%, 17%, and - 7% for the past five years. Based on these returns, what is the approximate probability that this stock will return at least 15% in any one given year?

• A) 0.5%
• B) 1.0%
• C) 2.5%
• D) 5.0%
• E) 16.0%

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Definitions:

Markup

The additional sum included in the goods' cost price to account for overhead expenses and profit.

Manufacturing Cost

The total cost involved in making a product, including direct materials, direct labor, and manufacturing overhead.

Fixed Manufacturing Overhead

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance of a manufacturing facility.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or job orders, based on estimated costs and activity levels.