A Portfolio Has a Standard Deviation of 15

question 58

Multiple Choice

A portfolio has a standard deviation of 15.8 percent and an average return of 14.2 percent.What loss is associated with a 2.5 percent probability?

• A)-12.03 percent
• B)-14.87 percent
• C)-16.77 percent
• D)-17.38 percent
• E)-19.36 percent

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing ownership equity.

Net Income

Represents the total profit of a company after all expenses and taxes have been deducted from total revenue.

Preferred Dividends

Preferred dividends are payments made to preferred shareholders before any dividends are distributed to common shareholders.

Return On Common Stockholders' Equity

A financial ratio that measures the amount of net income returned as a percentage of shareholders equity, indicating the profitability from the shareholders' perspective.