An investment strategy has an expected return of 8 percent and a standard deviation of 6 percent.

Question:

An investment strategy has an of 8 percent and a standard deviation of 6 percent. Assume investment returns are bell shaped.
a. How likely is it to earn a return between 2 percent and 14 percent?
b. How likely is it to earn a return greater than 14 percent?
c. How likely is it to earn a return below –4 percent?

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...