Your friend is the owner of a stock which had returns of 6%, 17%, and 1% for the past three years. Your friend thinks the stock may be able to achieve a return of 32.6% or more. Based on these returns, what is the probability that this stock will earn at least the 32.6% in any one given year?

Question

Quizplus · Accepted Answer

The probability is calculated based on historical data. Since none of the past returns (6%, 17%, 1%) reached 32.6%, the probability is 0%, but the closest option is 0.5%.

Your Friend Is the Owner of a Stock Which Had