What Range of Returns Would an Investor Expect to Achieve

question 5

Multiple Choice

What range of returns would an investor expect to achieve 99% of the time on an investment with an expected return of 11% and a standard deviation of 16%?

• A)5% to 27%
• B)-5% to 27%
• C)-21% to 43%
• D)-37% to 59%
• E)5% to 21%

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Definitions:

Interest Rate

The percentage of a sum of money charged for its use, commonly expressed as an annual percentage rate.

Efficient Markets Hypothesis

The theory that all available information is already reflected in asset prices, implying that stocks always trade at their fair value, making it impossible to consistently achieve higher-than-average returns.

Efficient Markets Hypothesis

The theory that all available information is already reflected in stock prices, thus making it impossible to consistently achieve higher returns.

Return And Risk

Concepts in finance and investing that denote the potential profit or loss and the uncertainty associated with an investment.