The Following Frequency Distribution Shows the Monthly Stock Returns for Home

question 83

Multiple Choice

The following frequency distribution shows the monthly stock returns for Home Depot for the years 2003 through 2007. Over the time period,the following summary statistics are provided: Mean = 0.31%,Standard deviation = 6.49%,Skewness = 0.15,and Kurtosis = 0.38.The probability that the return is less than −5% if the return is normally distributed is _______.

• A) 0.2061
• B) 0.2740
• C) 0.2841
• D) 0.2358

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Definitions:

Accounts Receivable Turnover

A financial ratio indicating how many times a company's receivables are turned into cash over a period.

Price-Earnings Ratio

A valuation metric that compares a company's share price to its earnings per share, used to gauge if a stock is over or under-valued.

Interest Expense

The cost incurred by an entity for borrowed funds, typically reflected as a charge in the income statement.

Dividends Per Common Share

The amount of declared dividends for the period that is intended for each share of common stock held.