Your Portfolio Has an Annualized Standard Deviation of 15

question 76

Multiple Choice

Your portfolio has an annualized standard deviation of 15.6% and average annual return of 12.8%. You have a 5% probability of losing ________ or more in any given year. Note: the 5% probability level has a "Z" value of 1.645.

• A) 18.63%
• B) 14.00%
• C) 12.86%
• D) 10.34%
• E) 9.51%

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Definitions:

Hypothesis

A proposed explanation made on the basis of limited evidence as a starting point for further investigation.

Evidence

Information or facts that are used to support the validity of a statement or argument.

Interpretation

An expression of the meaning or significance of a wide variety of experiences, situations, data, events, judgments, conventions, beliefs, rules, procedures, or criteria.

Inference

Identifies and secures elements needed to draw reasonable conclusions; it forms conjectures and hypotheses, it considers relevant information, and it reduces or draws out the consequences flowing from data, statements, principles, evidence, judgments, beliefs, opinions, concepts, descriptions, questions, or other forms of representation.