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A stock has an average return of 19.2 percent and a standard deviation of 10.7 percent. In any one given year, you have a 95 percent chance that you will not lose more than _____ percent nor earn more than ____ percent if you invest in this security.

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tanseershar

Answer:

1. -2.2% 2. 40.6%

Explanation:

95%probability range =0.192±(2*.0107)=-2.2% to 40.6%

With the use of tables, we can work out above figures

95% given in question

Standard deviation given 10.7%

Average return=19.2%

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