suyash1989

As far as the calculation, I can't tell you. But intuitively that problem is easy to figure out. If you expect an investment to earn 10% and it has a 5% std deviation, what is the probability that you'll earn at least 5% in a given year?

It has to be greater than 50% because expected return - Std Deviation is equal to the threshold rate of 5%. So you can eliminate 34% right off the bat. Then you're choosing between 84% and 98%, which is also easy because 98% is obviously not the right answer. That's a fairly large std deviation with the expected return not too far greater than the threshold. Therefore you're left with 84% as the only possible answer.