The Expected Value and the Standard Deviation of Returns for Asset

question 173

Multiple Choice

The expected value and the standard deviation of returns for asset A is ________. (See below.) Asset A

• A) 12 percent and 4 percent
• B) 12.7 percent and 2.3 percent
• C) 12.7 percent and 4 percent
• D) 12 percent and 2.3 percent

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Definitions:

Annual Coupon

The yearly interest payment made to bondholders, usually fixed and expressed as a percentage of the bond's face value.

Market Risk

The possibility of investors experiencing losses due to factors that affect the overall performance of the financial markets.

Coupon Rate

The proportion of the bond's face value that is paid as interest each year, expressed in percentage terms.

Par Value

The issuer-designated value of a bond, share of stock, or coupon, known as its nominal or face value.