5. Which of the following are true about fat tail distributions? A. They are a good model for some financial data

B. The mean is a good representation of the distribution

C. They are the best choice for most types of data

D. We must rely on the central limit theorem to gather useful information about them.

Consider the following information on stocks a, b, c and their returns (in decimals) in each state: state prob. of state a b c boom 20% 0.27 0.22 0.16 good 45% 0.16 0.09 0.07 poor 25% 0.03 0 0.03 bust 10% -0.08 -0.04 -0.02 if your portfolio is invested 25% in a, 40% in b, and 35% in c, what is the standard deviation of the portfolio in percent? answer to two decimals, carry intermediate calcs. to at least four decimals.