Suppose You Have the Choice Between Two Investments - One

question 43

Multiple Choice

Suppose you have the choice between two investments - one that pays fixed interest of 4% p.a. ,and another whose returns are normally distributed with an expected return of 10% and standard deviation of 3%.What is the likelihood of receiving a return on the second investment that is equal to or greater than that which can be received from the first investment? (Hint: the area under a curve for 1 std dev is 34.13%,2 std dev is 47.73% and 3 std dev is 49.87%. )

• A)97.73%
• B)84.13%
• C)65.87%
• D)52.27%

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Definitions:

Social Significance

The importance or meaning of something within society or a specific community, influencing norms, behaviors, and values.

Social Identity

A person's sense of who they are based on their group membership(s), including nationality, ethnicity, religious affiliation, and social class.

Sense of Stability

The feeling of consistency, security, and confidence in one's life or environment.

Daily Rhythm

The natural cycle of physical, mental, and behavioral changes that the body goes through in a 24-hour period, influenced by light and darkness in an organism's environment.