You Find That the Annual Standard Deviation of a Stock's

question 77

Multiple Choice

You find that the annual standard deviation of a stock's returns is equal to 25%.For a 3 year holding period the standard deviation of your total return would equal _______.

• A) 75%
• B) 25%
• C) 43%
• D) 55%

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Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Compounded Annually

The process by which interest is calculated on an investment or loan annually, with each year's interest added to the principal.

Interest Rate

The percentage at which interest is charged or paid on a loan or investment over a specific period.

Future Value

The estimated value of an investment at a specified date in the future, given a certain rate of interest or rate of return.