A Stock Is Valued at $28

question 18

Multiple Choice

A stock is valued at $28.00.The annual expected return is 9.0% and the standard deviation of annualized returns is 19.0%.If the stock is lognormally distributed,what is the expected price after 4 years?

• A) $28.00
• B) $32.33
• C) $40.13
• D) $54.60

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Definitions:

Journal

An accounting record where all transactions are initially recorded using the double-entry bookkeeping system before their details are posted to accounts in the general ledger.

T Account

A graphical representation used in accounting to depict the debit and credit sides of a ledger for easier visualization and understanding.

Account Title Column

The section of an accounting ledger or journal used to record the name of the account affected by each transaction.

Accounts Payable

Short-term liabilities or debts a company owes to its suppliers or creditors for goods and services received but not yet paid for.