A Return Series Has an Arithmetic Mean of 10

question 71

Multiple Choice

A return series has an arithmetic mean of 10.5% and standard deviation of 13%. Assuming the returns are normally distributed what is the range of returns that an investor would expect to receive 90% of the time?

• A)10.5% to 13%
• B)-2.5% to 23.5%
• C)-28.5 to 49.5%
• D)-15.5% to 36.5%
• E)0% to 10.5%

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Definitions:

Stockholders' Equity Accounts

These accounts represent the owners' residual interest in the corporation's assets after deducting liabilities.

Credit Balances

Accounts within the accounting ledger that have a positive balance, indicating amounts owed to others.

Trial Balance

A list of all accounts with their balances to provide a check on the equality of the debits and credits.

Balance Sheet

A financial statement that presents a company’s assets, liabilities, and shareholders’ equity at a specific point in time, showing the company’s financial condition.