The Average Annual Return Over the Period 1886-2006 for Stocks

question 35

Multiple Choice

The average annual return over the period 1886-2006 for stocks that comprise the S&P 500 is 10.5%,and the standard deviation of returns is 18.5%.Based on these numbers,what is a 95% confidence interval for 2007 returns?

• A)-18.5%,18.5%
• B)-10%,10%
• C)-26.5%,47.5%
• D)-37%,37%
• E)-8%,29%

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Definitions:

Overhead Allocation

The process of distributing indirect costs to cost objects such as products, services, or departments.

Departmental Overhead Rate

The allocation of indirect costs to specific departments based on relevant activity bases, such as labor hours or machine hours, to more accurately assign costs.

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing a product or providing a service.

Baking Department

A division within a business that specializes in the preparation and production of baked goods.