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:

Congruence

The agreement or harmony between thoughts, feelings, and behaviors, or the geometric concept where figures are identical in shape and size.

Carl Rogers

An influential American psychologist who founded client-centered therapy and emphasized the importance of unconditional positive regard in the therapeutic process.

Self-monitoring

The process of observing and regulating one's own behavior, thoughts, and emotions in various situations.

Neuroticism

A personality trait characterized by emotional instability, anxiety, moodiness, irritability, and sadness.