For Lognormally Distributed Returns,the Annual Compound Returns Equal

question 2

Multiple Choice

For lognormally distributed returns,the annual compound returns equal:

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

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Hypotheses

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