Using Probability Distributions Refer to the table in Problem 11.7.

Suppose the returns on German and Danish equities are normally distributed. Based on the historical record, answer the following questions.

(a) What is the probability that, in any given year, the return on German equities will be greater than 10 per cent? Less than 0 per cent?

(b) In 2008 the return on German equities was –36.67 per cent. How likely is it that such a low return will recur at some point in the future? In 2009 German equities had a return of 29.15 per cent. How likely is it that such a high return on German equities will recur at some point in the future?