Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 5 . 7 percent and the standard

Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 5.7 percent and the standard deviation was 18.3 percent.
a. What is the probability that your return on this asset will be less than -4.1 percent in a given year? Use the NORMDIST function in Excel ? to answer this question. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.)
b. What range of returns would you expect to see 95 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,32.16.)
c. What range of returns would you expect to see 99 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,32.16.)
\table[[a. Probablility,-6.10,%,,,],[b.95% level,,%,to,,%
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Investments

Authors: Alan Marcus, Zvi Bodie, Michael Drew, Anup Basu, Alex Kane

1st Edition

0071012389, 978-0071012386

More Books

Students also viewed these Finance questions

Question

mple 10. Determine d dx S 0 t dt.

Answered: 1 week ago

Question

How can we confi rm both ourselves and others?

Answered: 1 week ago