41.0k views
1 vote
What proportion of the bond mutual funds are within one standard deviation of the mean?

1 Answer

2 votes

Final answer:

Approximately 68 percent of the bond mutual funds are within one standard deviation of the mean, according to the Empirical Rule for bell-shaped, symmetric distributions.

Step-by-step explanation:

The question pertains to the Empirical Rule and its application to bond mutual funds assuming that the bond returns follow a normal distribution. According to the Empirical Rule, for a distribution that is bell-shaped and symmetric:

  • About 68 percent of the data falls within one standard deviation of the mean.
  • About 95 percent of the data falls within two standard deviations of the mean.
  • More than 99 percent of the data falls within three standard deviations of the mean.

Therefore, assuming the bond mutual funds' returns are normally distributed and the distributions are bell-shaped and symmetric, approximately 68 percent of the bond mutual funds would be within one standard deviation of the mean.

User GeekedOut
by
8.1k points

No related questions found