The Figure Given Below Shows the Demand [D and D']

question 71

Multiple Choice

The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2

-If $30 is paid for a share of stock and the earning per share is $3, how long will it take for the firm's earnings to add up to the purchase price?

• A)30 years
• B)3 years
• C)27 years
• D)10 years
• E)90 years

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Definitions:

Risk

The possibility of loss, damage, or any other undesirable event.

Return

The profit or loss derived from an investment over a particular period, expressed either in percentage or absolute terms.

Tradeoff

A decision situation that involves diminishing or losing one quality, quantity, or property of a set or design in return for gains in other aspects.

Standard Deviation

A measure of the dispersion or variability in a set of data points, indicating how much the observations differ from the mean of the data set.