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Assume the returns from holding small-company stocks are normally distributed. Also assume the average annual return for holding the small- company stocks for a period
Assume the returns from holding small-company stocks are normally distributed. Also assume the average annual return for holding the small- company stocks for a period of time was 16.7 percent and the standard deviation of those stocks for the period was 34.4 percent. Use the NORMDIST function in Excel to answer the following questions. What is the approximate probability that your money will double in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 3 decimal places, e.g. 32.161.) Probability 0.773% What is the approximate probability that your money will triple in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 3 decimal places, e... 32.16161616.) Probability 0.0000049 References eBook & Resources Worksheet Difficulty: 2 Intermediate Section 10.4 The Variability of Returns: The Second Lesson Problem 10-25 Using Return Distributions ILO 31 Learning Objective: 10-03 Explain the historical risks on various important types of investments
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