Suppose You Own Two Stocks, a and B

question 62

Multiple Choice

Suppose you own two stocks, A and B. In year 1, stock A earns a 2% return and stock B earns a 9% return. In year 2, stock A earns an 18% return and stock B earns an 11% return. __________ has the higher arithmetic average return.

• A) Stock A
• B) Stock B
• C) The two stocks have the same arithmetic average return.
• D) At least three periods are needed to calculate the arithmetic average return.

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Definitions:

Legal Issue

A legal issue is a problem or dispute that involves matters governed by law, requiring the application of legal principles to resolve.

Discovery

The pre-trial phase in a lawsuit where each party investigates the facts of a case, by obtaining evidence from the opposing party and others.

Jury Rehear

Not a widely recognized legal term; potential confusion with "jury deliberation" or "jury rehearing," where a jury may be asked to reconsider aspects of a case.

Unprovoked Assault

An unexpected physical attack or aggressive act on someone without any prior provocation.