Suppose You Own a Risky Asset with an Expected Return

question 35

Multiple Choice

Suppose you own a risky asset with an expected return of 12.6 percent and a standard deviation of 18.2 percent.If the returns are normally distributed,the most accurate probability that the stock will return more than 50 percent in any one given year is best described as less than:

• A).025 percent.
• B).05 percent.
• C)2.5 percent.
• D).01 percent.
• E)1.25 percent.

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Definitions:

Cyanosis

A bluish discoloration of the skin resulting from poor circulation or inadequate oxygenation of the blood.

Intubation

The insertion of a tube into the body, typically to provide a passageway for air to enter and exit the lungs during anesthesia or severe illness.

Trachea

The windpipe, a tube extending from the larynx towards the lungs, providing the passage of air to the respiratory system.

Larynx

The part of the respiratory tract located in the neck that houses the vocal cords and is involved in breathing, speech, and swallowing.