If the mean of an investment's historical returns is 10.5% and the standard deviation of the returns is 11.3%,then there is a 68% chance the returns will lay between _________________
A)8.1% and 13.5%
B)10.5% and 11.3%
C)- 0.8% and 21.8%
D)- 11.3% and 32.3%

Question

Quizplus · Accepted Answer

According to the empirical rule (or 68-95-99.7 rule), for a normal distribution, approximately 68% of the data falls within one standard deviation of the mean. Therefore, to find the range, we subtract and add the standard deviation (11.3%) from the mean (10.5%). This gives us -0.8% (10.5% - 11.3%) and 21.8% (10.5% + 11.3%).

If the Mean of an Investment's Historical Returns Is 10