For Log-Normally Distributed Returns the Annul Compound Returns Is Equal

question 17

Multiple Choice

For log-normally distributed returns the annul compound returns is equal to:

• A) the arithmetic average returns minus half the variance
• B) the arithmetic average returns plus half the variance
• C) the arithmetic average returns minus half the standard deviation
• D) the arithmetic average returns plus half the standard deviation

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Definitions:

Industrial Production

A measure of the output of the industrial sector of the economy which includes manufacturing, mining, and utilities.

Aggregate Supply

The total supply of goods and services that companies in an economy plan on selling during a specific time period.

Deflation

A reduction in the general price level of goods and services in an economy over a period of time.

China

A country in East Asia, the world's most populous nation, with a rich cultural history and a significant global economic influence.