Question

Suppose the returns on an asset are normally distributed. The average annual return for the asset...

Suppose the returns on an asset are normally distributed. The average annual return for the asset over some period was 6.6 percent and the standard deviation of this asset for that period was 9.0 percent.

  

Based on this information, what is the approximate probability that your return on this asset will be less than -3.1 percent in a given year?

      


   

What range of returns would you expect to see 95 percent of the time?

     


    

What range would you expect to see 99 percent of the time?

     

Homework Answers

Answer #1

­

WHE I DID THIS TYPE OF SUM EARLIER, NORMAL DISTRIBUTION EXCEL FUNCTION IS TO BE USED. IT WAS MENTIONED IN SUM. SO I HAVE DONE THIS SUM SAME WAY. NEED ANY CHANGE, LET ME KNOW

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose the returns on an asset are normally distributed. Suppose the historical average annual return for...
Suppose the returns on an asset are normally distributed. Suppose the historical average annual return for the asset was 5.6 percent and the standard deviation was 10.3 percent. What is the probability that your return on this asset will be less than –2.5 percent in a given year? Use the NORMDIST function in Excel® to answer this question. What range of returns would you expect to see 95 percent of the time? What range would you expect to see 99...
Suppose the returns on an asset are normally distributed. The historical average annual return for the...
Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 5.9 percent and the standard deviation was 10.5 percent. a. What range of returns would you expect to see 95 percent of the time? (A negative answer should be indicated by a minus sign. Enter your answers for the range from lowest to highest. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,...
Suppose the returns on long-term corporate bonds are normally distributed. The average annual return for long-term...
Suppose the returns on long-term corporate bonds are normally distributed. The average annual return for long-term corporate bonds from 1926 to 2007 was 5.2 percent and the standard deviation of those bonds for that period was 9.4 percent. (a) Based on this historical record, what is the approximate probability that your return on these bonds will be less than -2.9 percent in a given year? (Do not round intermediate calculations.) 18.47% 20.22% 19.44% 38.88% 20.41%      (b) What range of...
Suppose the returns on Asset Y are normally distributed. The average annual return for this asset...
Suppose the returns on Asset Y are normally distributed. The average annual return for this asset over 50 years was 13.4 percent and the standard deviation of the returns was 23.5 percent. Based on the historical record, use the cumulative normal probability table (rounded to the nearest table value) in the appendix of the text to determine the probability that in any given year you will lose money by investing in common stock. What is the probablility of a return...
Assume that the returns from an asset are normally distributed. The average annual return for this...
Assume that the returns from an asset are normally distributed. The average annual return for this asset over a specific period was 14.7 percent and the standard deviation of those returns in this period was 43.59 percent. a. What is the approximate probability that your money will double in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What about triple in value? (Do...
Assume that the returns from an asset are normally distributed. The average annual return for this...
Assume that the returns from an asset are normally distributed. The average annual return for this asset over a specific period was 16.8 percent and the standard deviation of the asset was 42.30 percent. Use the NORMDIST function in Excel® to answer this question. What is the approximate probability that your money will double in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 3 decimal places, e.g., 32.161.) What...
Assume the returns from holding an asset are normally distributed. Also assume the average annual return...
Assume the returns from holding an asset are normally distributed. Also assume the average annual return for holding the asset a period of time was 15.9 percent and the standard deviation of this asset for the period was 33.8 percent. Use the NORMDIST function in Excel® to answer the following questions. a. What is the approximate probability that your money will double in value in a single year? (Do not round intermediate calculations and enter your answer as a percent...
1. Over a particular period, an asset had an average return of 6.9 percent and a...
1. Over a particular period, an asset had an average return of 6.9 percent and a standard deviation of 9.9 percent. What range of returns would you expect to see 95 percent of the time for this asset? (A negative answer should be indicated by a minus sign. Input your answers from lowest to highest to receive credit for your answers. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)...
Assume returns on a porfolio are normally distributed. Suppose a portfolio have average return of 15%...
Assume returns on a porfolio are normally distributed. Suppose a portfolio have average return of 15% with a standard deviation of 40%. A return of 0% means the value of the portfolio doesn't change, a negative return means that the portfolio loses money, and a positive return means that the portfolio gains money. a) what percent of years does this portfolio lose money have a return less than 0%? b) what is the cutoff of the highest 5% of annual...
The annual returns on Googol's stock share for the last four years were Normally distributed and...
The annual returns on Googol's stock share for the last four years were Normally distributed and equalled: 16 %, 8 %, -17 %, and 21 %, respectively. Using this information you can say that 95 % of the time the return over one year period lies in the following range: Multiple Choice between -50.54 % and 57.61 % between -47.68 % and 54.68 % between -26.74 % and 40.74 % between -9.87 % and 23.87 %
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT