You Own a Stock That You Think Will Produce a Return

question 43

Multiple Choice

You own a stock that you think will produce a return of 11 percent in a good economy and 3 percent in a poor economy.Given the probabilities of each state of the economy occurring,you anticipate that your stock will earn 6.5 percent next year.Which one of the following terms applies to this 6.5 percent?

• A)arithmetic return
• B)historical return
• C)expected return
• D)geometric return
• E)required return

---

Definitions:

Self-Conscious Emotions

Emotions that require self-awareness and reflection, such as guilt, shame, embarrassment, and pride.

Psychoanalytic Theory

A perspective introduced by Freud that development and behavior are stage-like and influenced by inner drives, memories, and conflicts of which an individual is unaware and cannot control.

Behaviorism

A theoretical approach that studies how observable behavior is controlled by the physical and social environment through conditioning.

Young Children

A term referring to children in the early stages of their life, typically before they start formal schooling.