If the economy strength is rated on an equally weighted five

If the economy strength is rated on an equally weighted five point scale, the expected returns for Wave Shredder Inc. are 3.5%, 5.0%, 7%, 9.5% and 12%. If the standard deviation is 2%, how many of these returns fall within 2 standard deviations of the expected return?

A. 1
B. 2
C. 3
D. 4
E. 5

Solution

Ans. C (3)

the mean return = 7.4%

standard deviation = 2%

2 standard deviation = 2*2% = 4%

with in 2 standard deviations interval is (7.4-4,7.4+4) = (3.4%,11.4%)

hence the answer is 3