A Stock's Price Is $20 at the Beginning of a Year

question 87

Multiple Choice

A stock's price is $20 at the beginning of a year. There is a 25 percent chance that the price will be $17 at the end of the year, and a 75 percent chance that the price will be $25 at the end of the year. The stock will pay a dividend of $3 during the year. The standard deviation of the return on the stock is ______percent (rounded to the nearest percentage point) .

• A)10
• B)12
• C)15
• D)17

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Definitions:

Public Charters

Special flight operations sanctioned by the government, allowing operators to provide services that are normally outside of their standard offerings.

Federal Law

Laws passed by the national government of a country, which are supreme and have precedence over state laws in matters within the jurisdiction of the national government.

State Legislation

A body of laws and regulations enacted by the legislative branch of a state government.

Commerce Clause

A provision in the United States Constitution that gives Congress the power to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.