Assume That Large-Company Stocks Had an Average Return of 11

question 89

Multiple Choice

Assume that large-company stocks had an average return of 11.4 percent and a standard deviation of 19.7 percent for a 40-year period.What range of returns would you expect to see on these stocks 95 percent of the time?

• A)-50.3 percent to 53.2 percent
• B)-50.3 percent to 73.9 percent
• C)-50.3 percent to 64.1 percent
• D)28.0 percent to 50.8 percent
• E)-28.0 percent to 50.8 percent

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Definitions:

Flat-Panel TVs

A type of television featuring a lightweight, thin display technology that occupies less space than traditional CRT TVs.

Consumer Goods

Products and services that are purchased or consumed by individuals for personal or household use.

Capital Goods

Long-lasting goods that are used to produce other goods or services and are not sold directly to consumers.

Law of Increasing Opportunity Costs

states that as production of one good increases, the opportunity cost of producing an additional unit of this good also increases, due to factors of production not being perfectly interchangeable.