Question
Question 3 Barilaro Ltd is a publicly listed company on the Australian Securities Exchange. Barilaros annual stock returns are assumed to be normally distributed with
Question 3
Barilaro Ltd is a publicly listed company on the Australian Securities Exchange. Barilaros annual stock returns are assumed to be normally distributed with a mean of 0.08 and a standard deviation of 0.04.
- What is the probability of Barilaros stock return exceeding 12%? Show all working.
- What is the probability of Barilaros stock return being less than -8%? Show all working.
- What is the probability of Barilaros stock return falling between 9% and 13%? Show all working.
- Discuss the disadvantages of assuming that stock returns are normally distributed.
- Discuss the difficulties associated with utilising ex-ante measures of risk.
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The Oxford Handbook Of Quantitative Asset Management
Authors: Bernd Scherer, Kenneth Winston
1st Edition
0199553432, 978-0199553433
