The Beginning Share Price for a Security Over a Three-Year

question 10

Multiple Choice

The beginning share price for a security over a three-year period was $50.Subsequent year-end prices were $62,$58 and $64.The arithmetic average annual rate of return and the geometric average annual rate of return for this stock was:

• A) 9.30% and 8.58% respectively.
• B) 9.30% and 7.89% respectively.
• C) 9.30% and 7.03% respectively.
• D) 9.30% and 6.37% respectively.

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Definitions:

Test Statistic

A statistic derived from sample data in a hypothesis test that is utilized to determine if the null hypothesis should be discarded.

Rejection Region

The range of values for which the null hypothesis is not considered probable and is rejected in hypothesis testing.

P-value

The probability of obtaining test results at least as extreme as the results observed during the test, assuming that the null hypothesis is correct.

F Value

A statistic used in ANOVA tests, representing the ratio of variance between groups to variance within groups.