For each investment class in Table 3, assume that future returns are normally distributed with the population mean and standard deviation as given. Based on this assumption:

1. For each investment class, find the probability of a return that is less than zero (that is, find the probability of a loss). Is your answer reasonable for all investment classes? Explain.

2, For each investment class, find the probability of a return that is:

a. Greater than 5%.

b. Greater than 10%.

c. Greater than 20%.

d. Greater than 50%.

3, For which investment classes is the probability of the return greater than 50% is essentially zero? For which investment classes is the probability of such a return greater than 1 percent? Greater than 5%?

4, For which investment classes is the probability of loss essentially zero?

5, For which investment classes is the probability of loss greater than 1%? Greater than 10%? Greater than 20%?

ical Table 3 Data on Rate of Return of Investment in Securities 16% Domestic small cap stocks 14% International equities Domestic midcap stocks 12% Domestic large cap stocks Mean return Non-U.S. government bonds 10% U.S. investment-grade corporate bonds U.S. Treasury bonds 8% Fixed annuities Cash equivalents 6% 0% 5% 10% 15% 20% 25% Standard deviation