Question: How do I answer this question The table uses the standard deviation of the portfolio's return as a measure of risk. A normal random variable,

 How do I answer this question The table uses the standard

How do I answer this question

deviation of the portfolio's return as a measure of risk. A normal

The table uses the standard deviation of the portfolio's return as a measure of risk. A normal random variable, such as a portfolio's return, stays within two standard deviations of its average approximately 95% of the time. Suppose Beth modifies her portfolio to contain 25% diversified stocks and 75% risk-free government bonds; that is, she chooses combination B. The average annual return for this type of portfolio is 6%, but given the standard deviation of 5%, the returns will typically (about 95% of the time) vary from a gain of to a loss of Grade It Now Save & Continue Continue without saving ChatGPT can make mistakes. Consider checking important information MAR

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!