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Thank you. Consider this normal distribution graph and the information below for the next two questions: 34.1% 34.1% Probability .40 .35 .30 .25 .20 .15
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Consider this normal distribution graph and the information below for the next two questions: 34.1% 34.1% Probability .40 .35 .30 .25 .20 .15 .10 .05 .00 13.6% 13.6% 2.1% 0.2% 2.1% 0.2% -3 -1 0 1 68.2% Units of the x axis measure standard deviations away from the average. 2 3 The %s, for our purposes, represent probabilities 95.4% 99.6% You have analyzed 30 years of historical, annual returns of the SPY ETF. SPY aims to follow the performance of the S&P 500 Large Cap stock index. You found the average return = 15% and the standard deviation of returns = 25%. You plan to model future SPY returns (for better or worse) as normally distributed, based on your historical analysis. What is the probability that, in any given future year, the SPY return will be between -35% and + 40%Step by Step Solution
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