Suppose You Own a Risky Asset with an Expected Return

question 45

Multiple Choice

Suppose you own a risky asset with an expected return of 12% and a standard deviation of 20%. If the returns are normally distributed, the approximate probability of receiving a return greater than 72%, or less than -48% is:

• A) greater than 99%
• B) greater than 95%
• C) less than 5%
• D) less than 1%

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Definitions:

Systematic Desensitization

A behavioral therapy technique used to help individuals overcome phobias and anxieties through gradual exposure to the feared object or situation.

Transference

A phenomenon in psychotherapy where patients project feelings or expectations from past relationships onto the therapist.

Problem Behavior

Actions or behaviors that are detrimental to oneself or others, often indicating underlying psychological issues.

Insight

The capacity to gain an accurate and deep understanding of someone or something.