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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Definitions:

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An area in the United States surrounding the Chesapeake Bay, known for its unique cultural heritage, history, and environmental significance.

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An economic theory and practice prevailing in Europe from the 16th to the 18th century, promoting governmental regulation of a nation's economy for the purpose of augmenting state power at the expense of rival national powers.

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