1. If my portfolio returns is normally distributed and has an expected mean of 10%, and my expected standard deviation is 20%, what is the range of returns that has an expected 0.683 probability of occurring?
-5% to 35%
-10% to 30%
-50% to 70%
-30% to 50%
2. Which of the following economic bias is best describes when decisions are affected use an initial piece of information to make subsequent judgments? For example, when you are asked to write the last four numbers of your social security number before bidding on a bottle of wine, those with higher four digit SSN numbers bid higher values for the same object. This is an example of:
Mental accounting
Regret avoidance
Limits to Arbitrage
Anchoring