Use the Following Historical Average Returns and Standard Deviations to Answer

question 110

Multiple Choice

Use the following historical average returns and standard deviations to answer the question below. What is the historical risk premium on Canadian common stocks?

• A) 0%
• B) 7.16%
• C) 9.55%
• D) 1.60%
• E) 8.75%

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Definitions:

Variable Costs

Costs that vary directly with the level of output, such as raw materials and direct labor expenses.

Labor

The human effort, either physical or mental, employed in the production of goods and services.

Materials

Raw elements or substances used in the production or manufacturing of goods.

Variable Costs

Costs that change in proportion to the level of output or activity.