M Chapter 10 Homework .> C | ezto.mheducation.com/hm.tpx 5· 20.00 points Suppose

Question

M Chapter 10 Homework .> C | ezto.mheducation.com/hm.tpx 5· 20.00 points Suppose the returns on an asset are normally distributed. Suppose the historical average annual return for the asset was 5 percent and the standard deviation was 18.4 percent. What is the probability that your return on this asset will be less than-6.5 percent in a given year? Use the NORMDIST function in Excelo to answer this question. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) Probability What range of returns would you expect to see 95 percent of the time? (Enter your answers for the range from lowest to highest. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places (e.g. 32.16).) 95% level %to What range would you expect to see 99 percent of the time? (Enter your answers for the range from lowest to highest. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).) 99% level %to References Worksheet Difficulty: 2 Intermediate DI CARLOS ampo..m.. Show all | × O Type here to search 40) ^ 08/11/2017 2

Explanation / Answer

1)

Probability =NORM.DIST(-6.5,5,18.4,TRUE) =0.265986 = 26.60 %

2)

Z = 1.96

X = mean + Z*SD to mean - Z*SD

5% - 1.96*18% to 5% + 1.96*18%

-30.28% to 40.28%

3)

Z = 2.576

X = mean + Z*SD to mean - Z*SD

5% - 2.576*18% to 5% + 2.576*18%

-41.37% to 51.37%

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.