Over the Past Four Years,the Common Stock of JL Steel

question 58

Multiple Choice

Over the past four years,the common stock of JL Steel Co.produced annual returns of 6.2,5.8,11.2,and 13.6 percent,respectively.Treasury bills produced returns of 3.4,3.3,4.1,and 4.7 percent,respectively over the same period.What is the standard deviation of the risk premium on JL Steel Co.stock for this time period?

• A)2.23 percent
• B)2.86 percent
• C)3.22 percent
• D)4.46 percent
• E)4.61 percent

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Definitions:

Price-Support Program

Government interventions to maintain the market price of a commodity or product above its equilibrium level to support the income of producers.

Freedom to Farm Act

A U.S. law enacted in 1996 aimed at allowing farmers the flexibility to plant what they choose, sell to whom they choose, and manage their business as they see fit, significantly reducing federal government involvement in farming decisions.

Misallocation

Misallocation refers to an inefficient allocation of resources, where goods or services are not distributed or allocated according to an optimal pattern, often leading to a loss of economic value.

Agricultural Resources

Inputs used in the production of agricultural goods, such as land, labor, capital, and raw materials.