A Stock Price Is $100

question 8

Multiple Choice

A stock price is $100.Volatility is estimated to be 20% per year.What is an estimate of the standard deviation of the change in the stock price in one week?

• A) $0.38
• B) $2.77
• C) $3.02
• D) $0.76

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Definitions:

Newsvendor Model

A mathematical model used in operations management and economics to determine optimal inventory levels for perishable or single-period products, balancing the costs of inventory shortage and overage.

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The frequency or rate at which customers enter a system, store, or facility.

Toretto Car Rentals

A fictional or possibly niche business entity specializing in the rental of vehicles, presumably named after a character from a popular movie franchise.

Overbooked Customers

A situation where more customers are accepted than can be served, often used in reference to airlines and hotels.