Saved

Help

Save & Exit

Subn

Exercise $6-48$ Algo

You are considering the risk$-$return profile of two mutual funds for investment. The relatively risky fund promises an expected return of $7\mathrm{.}5\%$ with a standard deviation of $11\mathrm{.}2\%.$ The relatively less risky fund promises an expected return and standard deviation of $4\mathrm{.}8\%$ and $6\mathrm{.}7\%,$ respectively. Assume that the returns are approximately normally distributed. $[$You may find it useful to reference the $z$ table.$]$

a$-1.$ Calculate the probability of earning a negative return for each fund. $($Round $"z"$ value to $2$ decimal places and final answers to $4$ decimal places.$)$

$\backslash$table$[[,$Probability$],[$Riskier fund,$],[$Less risky fund,$]]$