Question
Suppose the average return on Asset A is 6.8 percent and the standard deviation is 8.8 percent, and the average return and standard deviation on
Suppose the average return on Asset A is 6.8 percent and the standard deviation is 8.8 percent, and the average return and standard deviation on Asset B are 4 percent and 3.4 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 10 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 10 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 4.27 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 9.8 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
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