A Security Produced Returns of 13 Percent,18 Percent,9 Percent,23 Percent,and

question 53

Multiple Choice

A security produced returns of 13 percent,18 percent,9 percent,23 percent,and -17 percent over the past five years,respectively.Based on these five years,what is the probability that this stock will earn more than 24.76 percent in any one given year?

• A)0.5 percent
• B)1.0 percent
• C)2.5 percent
• D)5.0 percent
• E)16.0 percent

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Definitions:

Higher Opportunity Cost

The increased potential loss of choosing one option over another, indicating a sacrifice of higher value alternatives.

Absolute Advantage

The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.

Comparative Advantage

The capacity of a nation, person, business, or area to generate a product or offer a service with a smaller opportunity cost compared to its rivals.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors.