Trailer Co

question 35

Multiple Choice

Trailer Co.stock has an expected return of 12.2 percent and a standard deviation of 11.8 percent.What is the smallest expected loss over the next month given a probability of 5 percent?

• A) −4.59 percent
• B) −6.09 percent
• C) −7.27 percent
• D) −11.49 percent
• E) −13.77 percent

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Definitions:

Standard Error

The standard deviation of the sampling distribution of a statistic, most commonly the mean; it is used to estimate the accuracy of a sample mean compared to the population mean.

Confidence Interval

A range of values, derived from sample statistics, that is believed to contain the true value of a population parameter with a certain level of confidence.

Mean

Refers to the arithmetic average of a dataset, computed as the sum of all the numerical values divided by the count of values in the dataset.

Standard Error

The standard deviation of the sampling distribution of a statistic, often the mean, representing the accuracy with which a sample approximates a population.