If the returns on a stock index can be characterized by a normal distribution with mean 12%, the probability that returns will be lower than 12% over the next period equals ________.
A) 50%
B) 25%
C) 46%
D) 33%

Question

Quizplus · Accepted Answer

In a normal distribution, the mean divides the distribution into two equal halves. Therefore, the probability of returns being lower than the mean (12% in this case) is 50%.

If the Returns on a Stock Index Can Be Characterized