Sarah's portfolio has an expected annual return at 8%, with an annual standard deviation at 12%. If her investment returns are normally distributed, then in any given year Sarah has an approximate ________.
A) 50% chance that the actual return will be greater than 8%
B) 68% chance that the actual return will fall within 4% and 20%
C) 68% chance that the actual return will fall within -20% and 20%
D) 95% chance that the actual return will fall within -4% and 28%

Question

Quizplus · Accepted Answer

The expected return is the mean of the distribution, so there's a 50% chance the return will be greater than the mean (8%).

Sarah's Portfolio Has an Expected Annual Return at 8%, with an Annual