A Stock Is Expected to Return 13 Per Cent in an Economic

question 20

Multiple Choice

A stock is expected to return 13 per cent in an economic boom,10 per cent in a normal economy,and 3 per cent in a recessionary economy.Which one of the following will lower the overall expected rate of return on this stock?

• A)an increase in the probability of an economic boom
• B)an increase in the rate of return for a normal economy
• C)an increase in the rate of return in a recessionary economy
• D)a decrease in the probability of an economic boom
• E)a decrease in the probability of a recession occurring

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Definitions:

Socio-emotional Development

The process of developing the ability to understand, manage, and express the social and emotional aspects of one's life.

Physical Development

The biological progression of bodily growth and increase in size, motor skills, and coordination from infancy through adulthood.

Adolescent

Refers to an individual in the transitional stage of physical and psychological development that generally occurs during the period from puberty to legal adulthood.

Cognitive Developmental

The study of how thinking, problem solving, and intelligence evolve as people age, from infancy through adulthood.