An asset has an average annual historical return of 11.6 percent and a standard deviation of 17.8 percent. What range of returns would you expect to see 95 percent of the time?
A)−41.8% to + 65.0%
B)−34.4% to + 53.6%
C)−24.0% to + 47.2%
D)−6.2% to + 29.4%
E)−5.4% to + 41.0%

Question

Quizplus · Accepted Answer

Using the formula for the empirical rule, we can calculate that 95% of returns would fall within plus or minus two standard deviations of the mean. 
So, the range of returns would be:
(11.6% - 2*17.8%) to (11.6% + 2*17.8%) 
= -24.0% to +47.2%
Therefore, the best choice is C.

An Asset Has an Average Annual Historical Return of 11