Question
Suppose the average return on Asset A is 6.3 percent and the standard deviation is 7.5 percent, and the average return and standard deviation on
Suppose the average return on Asset A is 6.3 percent and the standard deviation is 7.5 percent, and the average return and standard deviation on Asset B are 3.4 percent and 3 percent, respectively. Further assume that the returns are normally 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 and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
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 and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
c-1. | In a particular year, the return on Asset A was 4.3 percent. How likely is it that such a low return will recur at some point in the future? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
c-2. | Asset B had a return of 10.1 percent in this same year. How likely is it that such a high return will recur at some point in the future? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
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