The Annual Standard Deviation of an Asset's Returns Is 15

question 40

Multiple Choice

The annual standard deviation of an asset's returns is 15%.What is the standard deviation of the average annual return on a five year investment in this asset,assuming there is no serial correlation in the returns?

• A) 75.00%
• B) 33.54%
• C) 15.00%
• D) 6.71%

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Definitions:

Merchandise Inventory

The goods available for sale to customers in retail or wholesale businesses, valued at lower of cost or market value on the balance sheet.

Credit Sales

Transactions where goods or services are provided to a customer with an agreement to pay at a later date.

Operating Expenses

Expenses related to the normal operations of a business, excluding the cost of goods sold.

Direct Labour Budget

A budget that forecasts the expense of direct labor needed to achieve manufacturing targets.