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Reading 7: Statistical Concepts and Market Returns - LOS d

Q14. Find the mean, median, and mode, respectively, of the following data:

3, 3, 5, 8, 9, 13, 17

A)   8; 8.28; 3.

B)   8.28; 8; 3.

C)   3; 8.28; 8.

Q15. An investor has a $15,000 portfolio consisting of $10,000 in stock A with an expected return of 20% and $5,000 in stock B with an expected return of 10%. What is the investor’s expected return on the portfolio?

A)      16.7%.

B)      12.2%.

C)      7.9%.

Q16. An investor has a portfolio with 10% cash, 30% bonds, and 60% stock. If last year’s return on cash was 2.0%, the return on bonds was 9.5%, and the return on stock was 25%, what was the return on the investor’s portfolio?

A)      36.50%.

B)      22.30%.

C)      18.05%.

Q17. Which of the following statements about a normal distribution is least accurate?

A)   Approximately 68% of the observations lie within +/- 1 standard deviation of the mean.

B)   The mean and variance completely define a normal distribution.

C)   A normal distribution has excess kurtosis of three.

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