If the Returns on a Stock Index Can Be Characterized

question 38

Multiple Choice

If the returns on a stock index can be characterized by a normal distribution with mean 12%,the probability that returns will be lower than 12% over the next period equals:

• A)50%
• B)25%
• C)46%
• D)33%
• E)70%

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Definitions:

Fixed Assets

Long-term tangible assets used in the operation of a business and not expected to be converted into cash within one year, such as buildings, machinery, and equipment.

Long-Term Liabilities

Liabilities that will not be due for a long time (usually more than one year).

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate if a stock is over or undervalued.

Annual Earnings

The total profit a company generates in one fiscal year before taxes and other deductions.