Scott Purchased 200 Shares of Frozen Foods Stock for $48

question 49

Multiple Choice

Scott purchased 200 shares of Frozen Foods stock for $48 a share.Four months later,he received a dividend of $0.22 a share and also sold the shares for $42 each.What was his annualized rate of return on this investment?

• A) -44.69 percent
• B) -40.14 percent
• C) -33.00 percent
• D) -31.95 percent
• E) -28.07 percent

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Definitions:

Normal Curve

A bell-shaped curve that represents a distribution of probabilities of a continuous random variable.

Binomial Probability

The probability of obtaining a specific number of successes out of a fixed number of binary trials.

Binomial Random Variable

A type of discrete random variable that counts how often a particular event occurs in a fixed number of tries or trials.

Normal Approximation

A statistical method where a binomial distribution is approximated using the normal distribution, usually applied when sample sizes are large.