You Are Introduced to an Investment That Has an Expected

question 54

Multiple Choice

You are introduced to an investment that has an expected return of 20% equal to the standard deviation of the distribution of returns.What is the probability that the investment will have a return less than 20% in the first year? Assume a normal distribution.

• A) 0%
• B) 50%
• C) 68%
• D) not enough information to determine

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Definitions:

Proportions

A statistical measure that reflects the relative size of one part compared to the whole, often expressed as a fraction or percentage.

Proportion of Female Managers

The percentage of managerial positions in an organization or sector that are occupied by women.

Null and Alternative Hypotheses

In hypothesis testing, the null hypothesis is a statement of no effect or no difference, and the alternative hypothesis is the statement that researchers seek to provide evidence for.

One-Sample Test

A statistical test used to determine whether a sample mean significantly differs from a known or hypothesized population mean.