Estimates of the Rate of Return on a Security Based

question 91

Multiple Choice

Estimates of the rate of return on a security based on a historical arithmetic average will probably tend to _____ the expected return for the long-term and estimates using the historical geometric average will probably tend to _____ the expected return for the short-term.

• A)overestimate; overestimate
• B)overestimate; underestimate
• C)underestimate; overestimate
• D)underestimate; underestimate
• E)accurately; accurately

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Definitions:

James Madison

An American statesman, diplomat, expansionist, philosopher, and Founding Father who served as the fourth president of the United States from 1809 to 1817, known as the "Father of the Constitution."

Directly Elected

A form of election where voters directly choose the person or political party they want in office, without the intervention of an electoral college or other bodies.