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NEW QUESTION: 1
In 2001, a portfolio with 6 stocks had the following total return rates in percentages:27.98%, 44.94%,
54.53%, -52.68%, 10.21%, 0.50%. The average return rate for this portfolio was 4.92% and the standard deviation was 37.66%. How confident are you that the return rates will fall within -51.57% and 61.41%?
A. 85%
B. 75%
C. 56%
Answer: C
Explanation:
-51.57% is 1.5 standard deviations below the mean and 61.41% is 1.5 standard deviations
2
above the mean. Therefore, we are confident that 1 - 1/1.5 = 56% of the return rates will fall within the specified range (Chebyshev's Inequality).