You Own a Stock That You Think Will Produce a Return

question 43

Multiple Choice

You own a stock that you think will produce a return of 11 percent in a good economy and 3 percent in a poor economy.Given the probabilities of each state of the economy occurring,you anticipate that your stock will earn 6.5 percent next year.Which one of the following terms applies to this 6.5 percent?

• A)arithmetic return
• B)historical return
• C)expected return
• D)geometric return
• E)required return

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Definitions:

Bipolar Disorder

Mood disorder characterized by periods of depression alternating with normal periods and periods of intense excitation, or mania.

Cingulate Cortex

A region of the brain within the medial aspect of the cerebral cortex, involved in processing emotions and behavior regulation.

Depressive Disorders

A group of conditions characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities, affecting daily functioning.

Baseline Activity

The level of cellular, biochemical, or physiological function before a specific stimulus or intervention is applied.