Question

Stock Z has an expected return of 12% with a standard deviation of 8%. If returns are normally distributed, then approximately two-thirds of the time the return on stock Z will be Group of answer choices between 12% and 20%. between 4% and 20%. between 8% and 12%. between -4% and 28%.

Answer 1

Answer:

between 4% and 20%

Explanation:

Given that :

Expected return = 12%

Standard deviation = 8%

The return on stock Z can be calculated thus

Interval = expected return ± standard deviation

Lower boundary = 12% - 8% = 4%

Upper boundary = 12% + 8% = 20%

Hence, return on stock Z will be between 4% and 20%