A Stock Has an Expected Rate of Return of 13

question 7

Multiple Choice

A stock has an expected rate of return of 13.9 percent and a standard deviation of 23.3 percent.Which one of the following best describes the probability that this stock will lose more than 1/3 of its value in any one year?

• A)Less than 0.1%
• B)Approximately 2.25%
• C)Approximately 1.13%
• D)Less than 0.26%
• E)Approximately 4.66%

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Definitions:

Entrepreneurs

Individuals who initiate, manage, and assume the risks of starting and running new businesses.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, often measured by GDP.

Economic Development

The approach a nation takes to boost the economic, political, and social welfare of its inhabitants.

Social Overhead Capital

Investment in basic infrastructure facilities such as roads, bridges, and utilities that are necessary for economic development.