A Stock Had Returns of 8%,39%,11%,and -24% for the Past

question 53

Multiple Choice

A stock had returns of 8%,39%,11%,and -24% for the past four years. Which one of the following best describes the probability that this stock will NOT lose more than 43% in any one given year?

• A) 84.0%
• B) 95.0%
• C) 97.5%
• D) 99.0%
• E) 99.5%

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Definitions:

Monthly Sales

The total revenue generated from the sale of goods or services within a specific month.

Net Operating Income

is the total profit of a business after deducting operating expenses but before subtracting taxes and interest.

Contribution Margin Ratio

A metric that reveals the percentage of sales revenue that exceeds variable costs and contributes to covering fixed costs and generating profit.

Margin of Safety

Represents the extent to which sales can drop before a business reaches its break-even point.