Over the Past Four Years,a Stock Produced Returns of 14

question 65

Multiple Choice

Over the past four years,a stock produced returns of 14 percent,22 percent,6 percent,and −19 percent.What is the approximate probability that an investor in this stock will not lose more than 30 percent nor earn more than 41 percent in any one given year?

• A)84 percent
• B)95 percent
• C)68 percent
• D)5 percent
• E)34 percent

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Definitions:

Deadweight Loss

Deadweight loss represents an economic inefficiency that happens when a good or service doesn't reach or cannot reach its equilibrium point.

Price Elasticity

An economic measure indicating how the quantity demanded of a product changes in response to a change in the price of that product.

Equilibrium Quantity

The equilibrium quantity is the quantity of goods or services that is supplied and demanded at the equilibrium price, where supply equals demand.

Deadweight Loss

A reduction in economic effectiveness occurring when a good or service doesn't attain market equilibrium in an unrestricted market scenario.