There Is a 35% Probability That a Particular Stock Will

question 69

Multiple Choice

There is a 35% probability that a particular stock will earn a 16% return and a 65% probability that it will earn 10%. What is the risk-free rate if the risk premium on the stock is 7.5%?

• A)4.20%
• B)4.60%
• C)5.20%
• D)5.40%
• E)5.80%

Recognize the tone suitable for business writing.

Grasp the application of politeness and its significance in business requests.

Distinguish between ethical and unethical practices in business communication.

Develop the ability to critically analyze the content and construct of business messages.

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Definitions:

Middle 87.4%

Represents the percentage of data falling in the middle range of a distribution, often referred to in terms of percentile ranks or areas under a curve in statistics.

-1.46 To 1.46

This range might represent values within one standard deviation from the mean in a normally distributed dataset, indicative of central concentration.

Lowest 9%

Indicates the minimum value or percentile, possibly in a collection of data or measurements, standing at 9%.

Z > -1.82

A condition referring to the area under the normal distribution curve to the right of Z = -1.82, indicating values above this Z-score.