A Stock Has an Average Historical Return of 11

question 80

Multiple Choice

A stock has an average historical return of 11.3 percent and a standard deviation of 20.2 percent.Which range of returns would you expect to see approximately two-thirds of the time?

• A) -23.8 to + 53.0 percent
• B) +4.6 to + 33.8 percent
• C) +5.8 to + 31.6 percent
• D) -3.9 to + 32.5 percent
• E) -8.9 to + 31.5 percent

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Definitions:

Creativity

Creativity is the ability to produce original and valuable ideas or solutions by thinking beyond established norms.

Vision

A mental image of a possible and desirable future state of the organization.

Framing Error

A mistake that occurs when information is presented or perceived in a way that biases or distorts decision making.

Sunk Cost Bias

The decision to continue an investment based on past investments of time, effort, and/or money.