Assume That the Returns from an Asset Are Normally Distributed

question 94

Multiple Choice

Assume that the returns from an asset are normally distributed.The average annual return for the asset is 18.1 percent and the standard deviation of the returns is 32.5 percent.What is the approximate probability that your money will triple in value in a single year?

• A)less than 0.5 percent
• B)less than 1 percent but greater than 0.5 percent
• C)less then 2.5 percent but greater than 1 percent
• D)less than 5 percent but greater than 2.5 percent
• E)less than 10 percent but greater than 5 percent

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Definitions:

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The condition of having finite assets, materials, or time available to accomplish a set of goals or tasks.

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A perspective that is based on long-established beliefs, values, or practices within a culture or society.

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Not operating normally or effectively, often referring to behaviors, relationships, or mechanisms.

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