Lester Has a Portfolio with an Average Return of 12

question 47

Multiple Choice

Lester has a portfolio with an average return of 12.8 percent and a standard deviation of 9.1 percent. He has a one percent probability of losing _____ percent or more in any given year.

• A) 33.97
• B) 38.87
• C) 20.67
• D) 5.04
• E) 8.37

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Definitions:

After Trade

After trade refers to the state of an economy, market, or trading partners following the completion of trade transactions, often highlighting changes in economic indicators or balances.

Production

The process of creating goods and services using inputs such as labor, capital, and raw materials.

Consumption

The use of goods and services by households, contributing to their wellbeing and the overall economy.

MRS

Marginal Rate of Substitution, the rate at which a consumer is ready to exchange quantities of one good for another good while maintaining the same level of utility.