Over the Past Four Years,the Common Stock of Jess Electronics

question 10

Multiple Choice

Over the past four years,the common stock of Jess Electronics Co.produced annual returns of 7.2,5.8,11.2,and 13.6 percent,respectively.Treasury bills produced returns of 3.4,3.3,4.1,and 4.0 percent,respectively over the same period.What is the standard deviation of the risk premium on Jess Electronics Co.stock for this time period?

• A) 2.23 percent
• B) 2.86 percent
• C) 3.22 percent
• D) 4.46 percent
• E) 4.61 percent

---

Definitions:

FASB

The Financial Accounting Standards Board is responsible for establishing accounting and financial reporting standards for companies and nonprofit organizations following Generally Accepted Accounting Principles (GAAP) in the United States.

Lease Classification

The categorization of lease agreements as either finance leases or operating leases, determined by specific criteria that affect the accounting treatment.

Lease Accounting

The accounting process that involves recording and managing leases, categorizing them as either operating or finance (capital) leases, and recognition of related expenses and liabilities.