A Hedge Fund Returns on Average 26% Per Year with a Standard

question 62

Multiple Choice

A hedge fund returns on average 26% per year with a standard deviation of 12%. Using the empirical rule, approximate the probability the fund returns over 50% next year.

• A) 0.5%
• B) 1%
• C) 2.5%
• D) 5%

---

Definitions:

APC

Average Propensity to Consume, which is a measure of the percentage of income that is spent on goods and services rather than being saved.

Income

Funds regularly amassed from labor or capital invested.

APS

The abbreviation for "Aggregate Planning Strategy," a process in operations management to balance production and demand over a medium-term horizon; or it could refer to "Automatic Payment System," depending on context.

Income

The financial gain earned by an individual or business, typically measured on an annual basis, coming from work, investments, or other sources.