Question
Normal probability distribution Assuming that the rates of return associated with a given asset investment are normally distributed; that the expected return, r , is
Normal probability distribution Assuming that the rates of return associated with a given asset investment are normally distributed; that the expected return,r, is 16.9%; and that the coefficient of variation,CV, is 1.92, answer the following questions:
a. Find the standard deviation of returns,r.
b. Calculate the range of expected return outcomes associated with the following probabilities ofoccurrence: (1) 68%, (2) 95%, (3) 99%.
1. The standard deviation of returns,r, is .....?%. (Round to three decimal places.)
2.(1)The lowest possible expected return associated with the 68% probability of occurrence is ....?%.(Round to two decimal places.)
The highest possible expected return associated with the 68% probability of occurrence is
.....?%. (Round to two decimal places.)
(2) The lowest possible expected return associated with the95% probability of occurrence is
....? (Round to two decimal places.)
The highest possible expected return associated with the 95% probability of occurrence is ....?(Round to two decimalplaces.)
(3) The lowest possible expected return associated with the99% probability of occurrence is
....? (Round to two decimal places.)
The highest possible expected return associated with the 99% probability of occurrence is ...?%. (Round to two decimalplaces.)
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