Question

An asset has an average historical rate of return of 10.1 percent and a variance of 0.0116751. What is the upper percentage range of returns would you expect to see approximately two-thirds of the time?

Answer 1

Answer:

20.91%

Explanation:

Provided information

Average historical rate of return = 10.1 %

Variance = 0.0116751

By considering the above information, the standard deviation would be

= Square root of Variance

= 10.81%

So the upper percentage range of return would be

= Standard deviation + standard deviation

= 10.81% + 10.1%

= 20.91%

Since we have to find out the upper percentage so we added it otherwise we have to deduct it