Question

You have an investment opportunity with the following normally distributed risk & return characteristics: Mean/Expected Return:...

You have an investment opportunity with the following normally distributed risk & return characteristics:

Mean/Expected Return: 11.5%

Standard Deviation: 7.5%

What is the likelihood the investment will return more than 19%?

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Answer #1

Probability the investment will return more than 19% = 1 - probability the investment will return less than 19%

Probability the investment will return less than 19% is calculated using NORMDIST function in Excel :

x = 19%

mean = 11.5%

standard_dev = 7.5%

cumulative = TRUE

Probability the investment will return less than 19% is 81.13%

Probability the investment will return more than 19% = 1 - probability the investment will return less than 19%

Probability the investment will return more than 19% = 1 - 81.13%

Probability the investment will return more than 19% = 15.87%

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