Normal probability distribution Assuming that the rates of return associated with a given asset investment are normally distributed; that the expected return,
r,
is
15.9%;
and that the coefficient of variation,
CV,
is
0.55,
answer the following questions:a. Find the standard deviation of returns,
σr.
b. Calculate the range of expected return outcomes associated with the following probabilities of occurrence: (1) 68%, (2) 95%, (3) 99%.
a. The standard deviation of returns,
σr,
is
nothing%.
(Round to three decimal places.)b. (1) The lowest possible expected return associated with the 68% probability of occurrence is
nothing%.
(Round to two decimal places.)The highest possible expected return associated with the 68% probability of occurrence is
nothing%.
(Round to two decimal places.)(2) The lowest possible expected return associated with the 95% probability of occurrence is
nothing%.
(Round to two decimal places.)The highest possible expected return associated with the 95% probability of occurrence is
nothing%.
(Round to two decimal places.)(3) The lowest possible expected return associated with the 99% probability of occurrence is
nothing%.
(Round to two decimal places.)The highest possible expected return associated with the 99% probability of occurrence is
nothing%.
(Round to two decimal places.)
ANSWER SUMMARY
Standard deviaition= 8.745%
Lowest 68% return= 7.16%
Highest 68% return= 24.65%
Lowest 95% return= -1.59%
Highest 95% return= 33.39%
Lowest 99% return= -10.34%
Highest 99% return= 42.14%
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