Question

The historical returns on a balanced portfolio have had an average return of 8% and a standard deviation of 15%. Assume that returns on this portfolio follow a normal distribution. [You may find it useful to reference the z table.]

a. What percentage of returns were greater than 53%? (Round your answer to 2 decimal places.)

b. What percentage of returns were below −7%? (Round your answer to 2 decimal places.)

Answer 1

X : returns on a balanced portfolio

X ~ N( 0.08 ,0.15 )

a). percentage of returns were greater than 53% be:-

  [ from standard normal table]

b).percentage of returns were below −7% be:-

  [ from standard normal table]

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