Phoenix Company Common Stock Is Currently Selling for $20 Per

question 51

Multiple Choice

Phoenix Company common stock is currently selling for $20 per share. Security analysts at Smith Blarney have assigned the following probability distribution to the price of (and rate of return on) Phoenix stock one year from now:
Assuming that Phoenix is not expected to pay any dividends during the coming year, determine the standard deviation of possible rates of return on Phoenix stock (to the nearest tenth of a percent) .

• A) 456%
• B) 20.9%
• C) 2.2%
• D) 21.4%

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Definitions:

Quantitative

Pertaining to the measurement or quantity of something, often involving numbers and statistical analysis.

Variable

An attribute or characteristic that can vary among subjects in a study, often classified as dependent or independent.

Quantitative Variable

A variable that can be measured and quantified, often expressed in numerical terms.

Outlier

An observation in a data set that is significantly different from the majority of the data, potentially indicating an error or a unique phenomenon.