Consider the Following Average Annual Returns: What Is the Excess

question 46

Multiple Choice

Consider the following average annual returns: What is the excess return for the portfolio of small stocks?

• A) 11.7%
• B) 16.6%
• C) 19.5%
• D) 17.6%

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Definitions:

Relative Frequency

The proportion of times a particular value or event occurs in relation to the total number of observations or trials.

Historical Data

Data collected from past events used to analyze trends, forecast future occurrences, or establish baselines in various fields like finance, meteorology, or scientific research.

Sunny Day

A day characterized by sunshine with little to no cloud cover, indicating clear weather conditions.

Probability

Probability is the measure of the likelihood that an event will occur, expressed as a number between 0 and 1.