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 6.6 percent and the standard deviation was

image text in transcribed
Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 6.6 percent and the standard deviation was 16.5 percent. a. What is the probobility that your return on this asset will be less than -8.5 percent in a given year? Use the NORMDIST function in Excel to answer this question. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.9., 32.16. b. What range of returns would you expect to see 95 percent of the time? Note: 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? Note: 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.9-, 32.16

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

Multinational Business Finance

Authors: David Eiteman, Arthur Stonehill, Michael Moffett

15th Global Edition

129227008X, 9781292270081

More Books

Students also viewed these Finance questions