Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hello, I need a little help figuring out the answer to this homework problem. Can someone help me? Problem 10-30 Using Probability Distributions Suppose the

Hello,

I need a little help figuring out the answer to this homework problem. Can someone help me?

image text in transcribed

Problem 10-30 Using Probability Distributions Suppose the average return on Asset A is 6.6 percent and the standard deviation is 7.8 percent and the average return and standard deviation on Asset B are 3.7 percent and 3.2 percent, respectively. Further assume that the returns are nomally distributed. Use the NORMDIST function in Excel to answer the following questions. a. What is the probability that in any given year, the return on Asset A will be greater than 9 percent? Less than 0 percent? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).) Greater than 9 percent Less than 0 percent b. What is the probability that in any given year, the return on Asset B will be greater than 9 percent? Less than 0 percent? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).) Greater than 9 percent Less than 0 percent C-1 In 1979, the return on Asset A was -4.33 percent How likely is it that such a low return will recur at some point in the future? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) Probability c-2 Asset B had a return of 10.40 percent in this same year. How likely is it that such a high return on Asset B ill recur at some point in the future? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) Probability

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

Financial Markets And Institutions

Authors: Stanley Eakins Frederic Mishkin

9th Global Edition

1292215003, 978-1292215006

More Books

Students also viewed these Finance questions

Question

explain what is meant by the terms unitarism and pluralism

Answered: 1 week ago