Use the table below to answer the following question(s).
Below is the spreadsheet for a portfolio allocation model.

Assume that the distributions of life insurance annual return is uniform distribution with minimum 4% and maximum 6%, bond mutual funds annual return is normal with mean 7% and standard deviation 1%, stock mutual funds annual return is lognormal with mean 11% and standard deviation 4%.
-What is the mean absolute deviation obtained from the simulation results for maximizing the total expected return? [Hint: Choose the approximate value.]
A)$ 887.25
B)$ 735.86
C)$ 643.69
D)$ 967.36

Question

Use the table below to answer the following question(s).
Below is the spreadsheet for a portfolio allocation model.
  
Assume that the distributions of life insurance annual return is uniform distribution with minimum 4% and maximum 6%, bond mutual funds annual return is normal with mean 7% and standard deviation 1%, stock mutual funds annual return is lognormal with mean 11% and standard deviation 4%.
-What is the mean absolute deviation obtained from the simulation results for maximizing the total expected return? [Hint: Choose the approximate value.]
A)$ 887.25 
B)$ 735.86 
C)$ 643.69 
D)$ 967.36

Quizplus · Accepted Answer

The mean absolute deviation is approximately $643.69, as indicated by the simulation results for maximizing the total expected return.

Use the Table Below to Answer the Following Question(s)