Sarah's Portfolio Has an Expected Annual Return at 10%, with an Annual

question 8

Multiple Choice

Sarah's portfolio has an expected annual return at 10%, with an annual standard deviation at 12%. If her investment returns are normally distributed, then in any given year Sarah has an approximate ________.

• A) 50% chance that the actual return will be greater than 12%
• B) 68% chance that the actual return will fall within -2% and 22%
• C) 68% chance that the actual return will fall within -20% and 22%
• D) 95% chance that the actual return will fall within -2% and 24%

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Definitions:

Perimenopause

The transitional phase before menopause when a woman's body undergoes physical changes and hormonal fluctuations.

Menopause

The period in a woman's life, typically between 45 and 55 years of age, marking the end of reproductive capability.

Andropause

Gradual changes in the sexual hormones and reproductive system of middle-aged males.

Erikson

Refers to Erik Erikson, a developmental psychologist known for his theory on the psychosocial development of humans, highlighting eight stages that cover the entire lifespan.