Assume the average return for blue chip common stocks is 12%, the standard deviation of...
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Accounting
Assume the average return for blue chip common stocks is 12%, the standard deviation of their returns is 20%, and the returns are normally distributed (bell curve). Which of the following statements is NOT true?
a. A16% chance (approximately) exists of getting a return greater than 32% on blue chips.
b. A 2.5% chance (approximately) exists of getting a return less than -48% on blue chips.
c. You would expect a return on blue chips to fall below -28% or above 52% about once every 20 years (5% chance).
d. The chance of the returns falling within three standard deviations of the mean is 99%. e. None of the above is true.
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