A Return Series Has an Arithmetic Mean of 12

question 26

Multiple Choice

A return series has an arithmetic mean of 12.8% and standard deviation of 7.8%. Assuming the returns are normally distributed what is the range of returns that an investor would expect to receive 90% of the time?

• A)12.8% to 20.6%
• B)-10.6% to 36.2%
• C)-2.8% to 28.4%
• D)-12.8% to 20.6%
• E)10.6% to 36.2%

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Definitions:

Direct Labor

The labor costs directly tied to the production of goods or services, including wages for workers who physically manufacture a product.

Raw Material

Fundamental materials in their original, altered, or partially processed forms that serve as inputs for manufacturing.

Selling and Administrative Expenses

Costs associated with selling products or services and managing the business, excluding production costs.

Fixed Overhead

Ongoing, recurring costs associated with operating a business that do not vary with production level or sales volume.