Annual returns on stocks are known to vary. Suppose that during the recent year,

Q: Annual returns on stocks are known to vary. Suppose that during the recent year,

here option B is correct b) If you invest in more and more stocks selected at random, then your average return on these stogcks will get closer and closer to 10.6%

ID: 3376136 • Letter: A

Question

Annual returns on stocks are known to vary. Suppose that during the recent year, the mean return was 10.6% and the standard deviation of returns was 32.3%. One of the statements below is correct. Identify which one is correct and explain why.

a) You can get an average return higher than 10.6% if you invest in an extremely large number of stocks

b) If you invest in more and more stocks selected at random, then your average return on these stogcks will get closer and closer to 10.6%

c) When you invest in a large numbeer of stocks chosen at random, your average return will approach a normal distribution.

Explanation / Answer

here option B is correct

b) If you invest in more and more stocks selected at random, then your average return on these stogcks will get closer and closer to 10.6%

Navigate

Annual returns on stock of the Mean Corporation are approximately normally distr

Annual returns on the more than 5000 common stocks availableto investors vary al

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.

Annual returns on stocks are known to vary. Suppose that during the recent year,

Question

Explanation / Answer

Related Questions

Navigate