A stock had annual returns of 5.3 percent, −2.7 percent, 16.2 percent, and 13.6 percent over the past four years. Which one of the following best describes the probability that this stock will produce a return of 20 percent or more in a single year?

Question

Quizplus · Accepted Answer

Given the annual returns listed, there is no direct way to calculate the exact probability of achieving a 20 percent return in a future year without more statistical data. However, we can infer that since one of the years had a return close to 20 percent (16.2 percent), the probability of achieving a 20 percent return is not impossible or extremely low. Therefore, the best estimate with the given options is that the probability is less than 16 percent but more than 2.5 percent, acknowledging the variability in the stock's performance without assuming an extremely high or low likelihood based on the provided returns.

A Stock Had Annual Returns of 5