Suppose You Own a Risky Asset with an Expected Return

question 25

Multiple Choice

Suppose you own a risky asset with an expected return of 12% and a standard deviation of 20%. If the returns are normally distributed, the approximate probability of receiving a return greater than 32% is:

• A) 0.67.
• B) 0.33.
• C) 0.05.
• D) 0.02.
• E) 0.16.

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Definitions:

Warehouse Rent

Warehouse rent refers to the cost associated with leasing a space used for storing goods in a warehouse.

Acquisition

The act of purchasing or otherwise obtaining control of something, often referring to business transactions where one company buys another.

Maintenance

The process of preserving a condition or situation, such as keeping machinery in operational order or sustaining a level of service.

Customer-Oriented

Being customer-oriented means prioritizing and addressing the needs, preferences, and satisfaction of customers in business practices and product development.