If the Standard Deviation of Annual Returns Is 19

question 60

Multiple Choice

If the standard deviation of annual returns is 19.8 percent and the number of years of observation is 107, what is the standard error?

• A)4.23 percent
• B)1.91 percent
• C)0.47 percent
• D)19.8 percent

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Definitions:

Future Value

The value of an investment or a sum of money at a specified future date, accounting for specified interest rates or earnings over time.

Actively Managed

Refers to investment funds where portfolio managers make specific investments with the goal of outperforming an investment benchmark index.

Mutual Funds

Investment programs funded by shareholders that trade in diversified holdings and are managed by professional investment managers.

Index Funds

Index Funds are mutual funds or exchange-traded funds (ETFs) designed to follow certain preset rules so that the fund can track a specified basket of underlying investments.