A Return Series Has an Arithmetic Mean of 12

question 42

Multiple Choice

A return series has an arithmetic mean of 12.8% and standard deviation of 7.8%.Assuming the returns are normally distributed what is the range of returns that an investor would expect to receive 95% of the time?

• A) 12.8% to 20.6%
• B) -10.6% to 36.2%
• C) -2.8% to 28.4%
• D) -12.8% to 20.6%
• E) 10.6% to 36.2%

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Definitions:

Positive Reinforcement

A process in which presenting a positive stimulus after a desired behavior increases the likelihood of that behavior occurring again.

Observational Learning

The process of acquiring new behaviors or knowledge by watching and imitating the actions of others, also known as social learning or modeling.

Model

In science and engineering, a model is an abstract representation meant to study, simulate, or explain the behavior of real systems or phenomena.

Discriminative Stimulus

A stimulus in the presence of which a particular response will be reinforced, used in behavioral psychology to study learning and conditioning.