Over the Past Five Years, Teen Clothing Stock Produced Returns

question 75

Multiple Choice

Over the past five years, Teen Clothing stock produced returns of 18.7, 5.8, 7.9, 10.8, and 11.6 percent, respectively. For the same five years, the risk-free rate was 5.2, 3.4, 2.8, 3.4, and 3.9 percent, respectively. What is the arithmetic average risk premium on Teen Clothing stock for this time period?

• A)6.89%
• B)7.01%
• C)7.22%
• D)7.34%
• E)7.57%

---

Definitions:

Economic Downturns

Periods of decreased economic activity characterized by reduced GDP, employment, and spending.

Vertical Mosaic

A concept referring to a society that is hierarchically structured along ethnic and occupational lines, highlighting how different communities occupy various social, economic, and political niches.

Porter

A porter typically refers to someone who carries luggage and other loads, especially in a hotel, airport, or railway station.

Institutional Racism

Occurs when organizational policies and practices systematically discriminate against people of some racial group or groups.