An Asset Has an Average Historical Rate of Return of 13.2

question 46

Multiple Choice

An asset has an average historical rate of return of 13.2 percent and a variance of .00972196.What range of returns would you expect to see approximately two-thirds of the time?

• A)-2.28 to +24.48 percent
• B)-6.52 to +32.92 percent
• C)-9.58 to +38.8 percent
• D)+3.34 to +23.06 percent
• E)+13.1 to +13.3 percent

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Definitions:

Even Dollar Increments

A pricing strategy where goods or services are priced in whole dollar amounts rather than including cents.

Complete Stranger

A person whom one does not know or with whom one is not familiar.

Expected Loss

The predicted amount of loss a business might suffer due to risks, calculated as the sum of all possible losses multiplied by their respective probabilities.

Weak Axiom

A principle used in consumer choice theory that stipulates if a consumer chooses bundle A over bundle B when both are affordable, then the consumer should not choose B over A when prices change, holding income constant.