A Return Series Has an Arithmetic Mean of 12

question 42

Multiple Choice

A return series has an arithmetic mean of 12.8% and standard deviation of 7.8%.Assuming the returns are normally distributed what is the range of returns that an investor would expect to receive 95% of the time?

• A) 12.8% to 20.6%
• B) -10.6% to 36.2%
• C) -2.8% to 28.4%
• D) -12.8% to 20.6%
• E) 10.6% to 36.2%

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Definitions:

Values

The importance, worth, or usefulness of something, or a set of beliefs or standards of behavior.

Null Hypothesis

A statement suggesting that there is no significant difference or relationship between specified populations, any observed effect is due to sampling or experimental error.

Statistical Hypothesis

Statement about an expected outcome or relationship involving population parameters.

Expected Outcome

The anticipated result or set of results from a scientific experiment or a statistical analysis.