You Find a Stock with Returns of 14

question 2

Multiple Choice

You find a stock with returns of 14.2%, - 10.1%, 8.7%, 29.7%, and 18.2%. The risk-free rate over this period was 6.4%, 6.8%, 5.2%, 4.4% and 5.3%. What was the standard deviation of the risk premium?

• A) 10.59%
• B) 11.86%
• C) 13.16%
• D) 14.02%
• E) 15.41%

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Definitions:

Wrongful Rejection

The unjust refusal to accept or pay for goods or services as per the terms of a contract.

Double Jeopardy

A legal principle that prevents an individual from being tried twice for the same offense in the same jurisdiction.

Implied Warranty

A legal concept that assumes a promise by a seller that the goods being sold meet certain quality standards, even if not explicitly stated.

Merchantability

An implied warranty that a product will meet reasonable expectations of quality and usability for the purpose it was sold for.