You Find a Certain Stock That Had Returns of 4

question 97

Multiple Choice

You find a certain stock that had returns of 4 percent,-5 percent,-15 percent,and 16 percent for four of the last five years.The average return of the stock for the 5-year period was 13 percent.What is the standard deviation of the stock's returns for the five-year period?

• A)21.39 percent
• B)24.98 percent
• C)27.16 percent
• D)31.23 percent
• E)34.02 percent

---

Definitions:

Dollar Change

The difference in the value of a financial instrument or market index between two points in time.

Dollar Exposure

The risk associated with changes in the value of the U.S. dollar compared to other currencies in international finance.

S&P 500 Index

A market-capitalization-weighted index of 500 of the largest publicly traded companies in the U.S.

Put Option

A financial derivative that gives the holder the right, but not the obligation, to sell a specific quantity of an underlying asset at a set price within a specified time.