Assume the Returns from an Asset Are Normally Distributed

Multiple Choice

Assume the returns from an asset are normally distributed. The average annual return for the asset is 17.4 percent and the standard deviation of the returns is 27.5 percent. What is the approximate probability that your money will double in value in a single year?

A) Close to .5 percent
B) Close to 1 percent
C) Less than 2.5 percent but greater than 1 percent
D) Less than 5 percent but greater than 2.5 percent
E) Less than 10 percent but greater than 5 percent