A Stock Has a Standard Deviation of Daily Returns of 3

question 31

Multiple Choice

A stock has a standard deviation of daily returns of 3 percent. It wants to determine the lower boundary of its probability distribution of returns, based on 1.65 standard deviations from the expected outcome. The stock's expected daily return is .1 percent. The lower boundary is

• A)- 1.65 percent.
• B)- 3.00 percent
• C)- 4.85 percent.
• D)- 5.05 percent.

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Definitions:

Fixed Assets

Long-term tangible assets that a company uses in its operations and that are not intended to be sold in the regular course of business.

Interest Expense

Interest expense is the cost incurred by an entity for borrowed funds, typically noted on the income statement as a non-operating expense.

Depreciation

A method used in accounting to divide the expenditure of a tangible asset over the time it is useful.

Taxes Paid

The total amount of taxes remitted to the government by an individual or organization, including income, sales, and property taxes.