A Stock Provides an Expected Return of 10% Per Year

question 20

Multiple Choice

A stock provides an expected return of 10% per year and has a volatility of 20% per year. What is the continuously compounded expected return in one year?

• A) 6%
• B) 8%
• C) 10%
• D) 12%

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Definitions:

Sciatic

Pertaining to the sciatic nerve, which is the longest nerve in the human body, running from the lower back down through the leg.

Femoral

Pertaining to the femur or the thigh region.

Pudendal

Related to the pudendal nerve, which supplies areas such as the external genitalia and the skin around the anus and perineum.

Musculocutaneous

Relating to both muscles and the skin, or a nerve in the arm that innervates the front muscles of the upper arm and the skin of the forearm.