An Investment Consultant Tells Her Client That the Probability of Making

question 96

Multiple Choice

An investment consultant tells her client that the probability of making a positive return with her suggested portfolio is 0.90.What is the risk,measured by standard deviation that this investment manager has assumed in his calculation if it is known that returns from her suggested portfolio are normally distributed with a mean of 6%?

• A) 1.28%
• B) 4.69%
• C) 6.00%
• D) 10.0%

---

Definitions:

Hostile Attribution Bias

The tendency to interpret others' behaviors as having hostile intent, even when the behaviors are ambiguous or benign.

Weapons Effect

The phenomenon where the mere presence of a weapon can increase aggression in individuals.

Narcissism

A personality trait characterized by an inflated sense of self-importance and a deep need for admiration and attention.

Grandiose View

An exaggerated self-perception of being superior, unique, or exceptional, often seen in narcissistic personality traits.