A stock has an average historical return of 10.7 percent and a standard deviation of 19.3 percent. Which range of returns would you expect to see approximately two-thirds of the time?
A)8.6% to + 30.0%
B)+4.6% to + 33.8%
C)−8.6% to + 30.0%
D)−3.9% to + 32.5%
E)−8.9% to + 31.5%

Question

Quizplus · Accepted Answer

The range of returns expected approximately two-thirds of the time for a distribution is within one standard deviation from the mean. Therefore, subtracting and adding one standard deviation (19.3%) from the mean (10.7%) gives a range of −8.6% to +30.0%.

A Stock Has an Average Historical Return of 10