What is the probability that small-company stocks will produce an annual return that is more than one standard deviation below the average?
A) 1.0 percent
B) 2.5 percent
C) 5.0 percent
D) 16 percent
E) 32 percent

Question

Quizplus · Accepted Answer

According to the empirical rule, approximately 68% of returns fall within one standard deviation of the average, leaving 16% below one standard deviation below the average. Therefore, the probability is 16%.

What Is the Probability That Small-Company Stocks Will Produce an Annual