Exhibit 31
Use the Information Below for the Following Problem(S)

question 70

Multiple Choice

Exhibit 3.1
Use the Information Below for the Following Problem(S)
$\begin{array}{lc}\text { Security } & \text { Annual Percentage Return } \\\hline \text { U.S. government T-bills } & 3.04 \\\text { Long-term government bonds } & 5.75 \\\text { Long-term corporate bonds } & 6.80 \\\text { Large capitalization common stocks } & 13.50 \\\text { Small canitalization common stocks } & 15.60\end{array}$

The annual rate of inflation is 2%.
-Refer to Exhibit 3.1.What is the real return on small capitalization stocks?

• A) 1.02%
• B) 3.68%
• C) 4.71%
• D) 11.27%
• E) 13.33%

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Definitions:

Performance Rating

A quantitative assessment often used to evaluate the efficiency, output, or success of an individual, system, or organization in achieving its objectives.

Normal Time

The average time that a worker takes to complete a specific task under normal working conditions, considering both productive and unproductive time.

Standard Time

indicates the amount of time that should be taken to complete a particular job or task, typically determined through time studies and used for planning and benchmarking.

Variable Allowance

An additional time or financial buffer incorporated into estimates or plans to accommodate uncertainty or variations from the norm.