An investment has an average return of 8.3%.The standard deviation of returns on this investment is 20.81%.Given this information,what is the range of return 99% of the time?
A)70.73% to -54.13%
B)70.73% to 8.3%
C)70.73% to 54.13%
D)8.3% to 54.13%

Question

Quizplus · Accepted Answer

Using the 3-sigma rule (99.7% confidence level), the range of returns can be calculated as the average return ± 3 times the standard deviation. Thus, 8.3% ± (3 * 20.81%) = 8.3% ± 62.43%, which gives the range of -54.13% to 70.73%.

An Investment Has an Average Return of 8