1 your stock investments return 8 12 and -4 in consecutive, Ask an Expert

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1. Your stock investments return 8%, 12%, and -4% in consecutive years.

• What is the sample standard deviation of the above returns?

• Using the standard deviation and mean that you just calculated, and assuming a normal probability distribution, what is the probability of losing 3% or more?

2. Which of the following is correct?

A. Diversification reduces common and independent risks.

B. Diversification is a way of spreading risk across investments, rather than actually reducing risk.

C. Diversification eliminates risk unique to a particular stock.

D. Diversification is not useful for the average investor.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92344191

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