You have a portfolio which has an average return of 10.3 percent.In any given year,you have a 2.5 percent probability of earning either a zero or a negative annual return.What is the approximate standard deviation of your portfolio?

A) 5.26 percent
B) 6.43 percent
C) 6.94 percent
D) 7.60 percent
E) 8.14 percent

Question

You have a portfolio which has an average return of 10.3 percent.In any given year,you have a 2.5 percent probability of earning either a zero or a negative annual return.What is the approximate standard deviation of your portfolio?

A) 5.26 percent 
B) 6.43 percent 
C) 6.94 percent 
D) 7.60 percent 
E) 8.14 percent

Quizplus · Accepted Answer

0.0 = 0.103 − 1.96 (σ); σ = 5.26 percent

You Have a Portfolio Which Has an Average Return of 10.3