The Wider the Distribution of an Investment's Returns Over Time

question 81

Multiple Choice

The wider the distribution of an investment's returns over time, the ________ the expected average rate of return and the ________ the expected volatility of those returns.

• A)higher; higher
• B)higher; lower
• C)lower; higher
• D)lower; lower
• E)The distribution of returns does not affect the expected average rate of return.

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Definitions:

Adjusting Entry

An entry made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Interest Owed

The amount of interest that has been incurred but not yet paid over a specific period.

Overstatement

This refers to the act of reporting a figure in financial statements that is higher than the actual or true value.

Unearned Rent

Refers to the amount received by a landlord for rent which has not yet been earned because the rental period has not occurred.