An investment has a mean return of 15% and a standard deviation of returns equal to 10%. Which of the following statements is least accurate? The probability of obtaining a return: A)greater than 25% is 0.32. B)between 5% and 25% is 0.68. C)greater than 35% is 0.025.
I think it’s A. Seem to remember 68% of results falls within 1 standard deviation of the mean. And 95% falls within two standard deviations, meaning 5% fall outside that (ie 2.5% above, 2.5% below). So B and C are correct, leaving A.
Yup, I second that. Greater than 25% will be 0.16 0.68 of the results fall within 1 SD so 0.32 of the results are in both the tails - Greater than 25% and less than 5%. So each will have 0.16. Hence A is least accurate.