If the mean of an investment's historical returns is 12.5% and the standard deviation of the returns is 4.3%,then there is a 68% chance the returns will sit between ________________.
A)3.9 and 21.1%
B)- 8.2% and 16.8%
C)8.2% and 16.8%
D)- 0.4% and 25.4%

Question

Quizplus · Accepted Answer

According to the empirical rule, 68% of the data lies within one standard deviation of the mean. Therefore, one standard deviation below the mean is 12.5% - 4.3% = 8.2%, and one standard deviation above the mean is 12.5% + 4.3% = 16.8%. Thus, the returns are expected to lie between 8.2% and 16.8% with a 68% confidence level.

If the Mean of an Investment's Historical Returns Is 12