You Own a Stock That Has Produced an Arithmetic Average

question 15

Multiple Choice

You own a stock that has produced an arithmetic average return of 8.6 percent over the past five years. The annual returns for the first four years were 16, 11, −19, and 3 percent, respectively. What was the rate of return on the stock in year five?

• A)−5.00%
• B)2.75%
• C)6.25%
• D)28.00%
• E)32.00%

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Definitions:

Strict Product Liability

A legal doctrine holding manufacturers and sellers accountable for distributing products that are defective, making them liable for any resulting injuries.

Defective

Having flaws or faults impairing functionality or safety, often leading to the failure of a product to meet acceptable standards.

Dangerous

Having the potential to cause harm, injury, or adverse effects to individuals or property.

Restatement of Torts

A set of model legal doctrines in the United States that seek to inform and synthesize tort law, compiled and published by the American Law Institute.