Two Stocks,A and B,have Expected Returns for One Year Of -

question 13

Multiple Choice

Two stocks,A and B,have expected returns for one year of $- 10 \%$ and $+ 10 \%$ respectively.The stocks have identical prices of $100 each,do not pay dividends,and the one-year risk-free rate of return is 2% in simple terms.The one-year forward prices of the two stocks are:

• A)A: 90;B: 110
• B)A: 92;B: 112
• C)A;102;B: 102
• D)A: 112;B: 112

---

Definitions:

Logarithmic Approach

A mathematical method used for scaling data or solving certain types of equations involving exponential relationships.

Learning Rate

The speed at which learning happens, often used to describe the reduction in time or cost to perform a task as experience with the task increases.

Logarithmic Approach

A mathematical method involving logarithms to solve certain types of problems or equations, often used in growth models or data analysis.

Learning Rate

The speed at which a person acquires knowledge or skills, often quantified in educational or organizational training contexts.