A Mutual Fund's Average Annual Return Is 8% and Its

question 47

Multiple Choice

A mutual fund's average annual return is 8% and its standard deviation is 8%. An investor would expect 95% of the fund's returns to fall within what range?

• A) Between 0% and 8%.
• B) Between 0% and 16%.
• C) Between −16% and 32%.
• D) Between −8% and 24%.

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Definitions:

Treasury Bills

Short-term government securities issued at a discount from the face value and maturing in a year or less, representing a secure investment.

Collection Time

The typical period a business waits to receive money owed by its customers.

Weekly Disbursements

The total amount of money a business pays out in a week, covering expenses such as salaries, supplier payments, and other operational costs.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision. It represents the benefits an individual, investor, or business misses out on when choosing one alternative over another.