Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume the returns from holding an asset are normally distributed. Also assume the average annual return for holding the asset a period of time was

Assume the returns from holding an asset are normally distributed. Also assume the average annual return for holding the asset a period of time was 15.4 percent and the standard deviation of this asset for the period was 33.3 percent. Use the NORMDIST function in Excelo to answer the following questions.
a. What is the approximate probability that your money will double in value in a single year?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 3 decimal places, e.g.,32.161.
b. What is the approximate probability that your money will triple in value in a single year?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 8 decimal places, e.g.,32.16161616.
\table[[a. Probability,%
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Agricultural Finance

Authors: Charles Moss

1st Edition

0415599075, 978-0415599078

More Books

Students also viewed these Finance questions

Question

DESCRIBE how to evaluate the training effort.

Answered: 1 week ago