Question

Normal probability distribution Answer the following questions, assuming that the rates of return associated with a...

Normal probability distribution Answer the following questions, assuming that

the rates of return associated with a given asset investment are normally distrib- uted; that the expected return, r, is 18.9%; and that the coefficient of variation, CV, is 0.75.

  1. Find the standard deviation of returns, s.
  2. Calculate the range of expected return outcomes associated with the following probabilities of occurrence: (1) 68%, (2) 95%, (3) 99.7%.
  3. Draw the probability distribution associated with your findings in parts a and b.
Math   Statistics-And-Probability   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #2

answered by: anonymous
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Normal probability distribution   Assuming that the rates of return associated with a given asset investment are...
Normal probability distribution   Assuming that the rates of return associated with a given asset investment are normally​ distributed; that the expected​ return, r​, is 16.7​%; and that the coefficient of​ variation, CV​, is 1.06​, 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%.
Normal probability distribution   Assuming that the rates of return associated with a given asset investment are...
Normal probability distribution   Assuming that the rates of return associated with a given asset investment are normally​ distributed; that the expected​ return, r​, is 12.3​%; and that the coefficient of​ variation, CV​, is 1.11​, 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 13.65313.653​%. ​(Round to three decimal​ places.)b....
Normal probability distribution   Assuming that the rates of return associated with a given asset investment are...
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....
Integrative—Expected return, standard​ deviation, and coefficient of variation   An asset is currently being considered by Perth...
Integrative—Expected return, standard​ deviation, and coefficient of variation   An asset is currently being considered by Perth Industries. The probability distribution of expected returns for this asset is shown in the following​ table, j Pr ​Return, r 1    0.05 15.00​% 2 0.15 5.00​% 3 0.70                 0.00​% 4 0.05 −5.00​% 5 0.05 −10.00​% . a.Calculate the expected value of​ return, r​, for the asset. b. Calculate the standard​ deviation, for the​ asset's returns. c. Calculate the coefficient of​ variation, CV​,...
Integrative—Expected return, standard​ deviation, and coefficient of variation   An asset is currently being considered by Perth...
Integrative—Expected return, standard​ deviation, and coefficient of variation   An asset is currently being considered by Perth Industries. The probability distribution of expected returns for this asset is shown in the following​ table, 1   0.05   35.00% 2   0.25   20.00% 3   0.55   5.00% 4   0.05   0.00% 5   0.10   -5.00% a.  Calculate the expected value of​ return, for the asset. b. Calculate the standard​ deviation​,for the​ asset's returns. c. Calculate the coefficient of​ variation, CV​,for the​ asset's returns.
You invest in a stock with the following probability distribution of returns: A probability of .15...
You invest in a stock with the following probability distribution of returns: A probability of .15 that the return will be 16%; a probability of .35 that the return will be 24%; a probability of .3 that the return will be -40%; and a probability of .2 that the return will be 45%. Based on this data and assuming the stock returns are normally distributed, you can say with a probability of 68% that the actual return will be in...
4. Statistical measures of standalone risk Remember, the expected value of a probability distribution is a...
4. Statistical measures of standalone risk Remember, the expected value of a probability distribution is a statistical measure of the average (mean) value expected to occur during all possible circumstances. To compute an asset’s expected return under a range of possible circumstances (or states of nature), multiply the anticipated return expected to result during each state of nature by its probability of occurrence. Consider the following case: James owns a two-stock portfolio that invests in Blue Llama Mining Company (BLM)...
Calculate the expected return, standard deviation, and coefficient of variation for the following probability distribution. Probability(%)...
Calculate the expected return, standard deviation, and coefficient of variation for the following probability distribution. Probability(%) Return(%) 10 12 25 18 45 20 20 -8   
The following probability distributions of return for Stock X have been estimated: Probability Stock X 0.3...
The following probability distributions of return for Stock X have been estimated: Probability Stock X 0.3 6% 0.4 9% 0.3 12% I. Calculate the expected rate of return ( ), standard deviation ( ), and the coefficient of variation (CV) for Stock X. The following probability distributions of return for Stock Y have been estimated: Probability Stock Y 0.3 3% 0.4 4% 0.3 5% II. Calculate the expected rate of return ( ), standard deviation ( ), and the coefficient...
A) Listed below is the probability distribution of the rates of return associated with 2 stocks,...
A) Listed below is the probability distribution of the rates of return associated with 2 stocks, RST corporation and ABC Inc. If an investor were to put in $40,000 in RST and $60,000 in ABC, calculate his portfolio's expected return and standard deviation. State of Economy Probability RST Corp. ABC Inc. Weak 30% -5% 20% Normal 40% 10% 5% Boom 30% 20% -5% B) If treasury securities are currently yielding 3%, the expected market risk premium is 7%, RST's beta...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT