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 16.2 percent and the standard deviation of this asset for the period was 34.7 percent. Use the NORMDIST function in Excel ? 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

Strategic Public Finance

Authors: Stephen Bailey

1st Edition

0333922212, 978-033392221

More Books

Students also viewed these Finance questions