The Expected Return on a Stock That Is Computed Using

question 15

Multiple Choice

The expected return on a stock that is computed using economic probabilities is:

• A)guaranteed to equal the actual average return on the stock for the next five years.
• B)guaranteed to be the minimal rate of return on the stock over the next two years.
• C)guaranteed to equal the actual return for the immediate twelve month period.
• D)a mathematical expectation based on a weighted average and not an actual anticipated outcome.
• E)the actual return you will receive.

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Definitions:

Investing Activities

Transactions involving the acquisition or disposal of long-term assets and other investments not considered cash equivalents.

Financing Activities

Transactions and events that influence the size and composition of the equity and borrowings of an entity, reflected within the cash flow statement.

Stock Dividend

A dividend payment made in the form of additional shares rather than cash, reflecting a company's decision to reinvest profits.

Accrued Expenses

Expenses that have been incurred but not yet paid for, representing future obligations that a company recognizes on its financial statements.