# Question: Returns on investments overseas especially in Europe and the Pacific

Returns on investments overseas, especially in Europe and the Pacific Rim, are expected to be higher than those of U.S. markets in the near term, and analysts are now recommending investments in international portfolios. An investment consultant believes that the probability distribution of returns (in percent per year) on one such portfolio is as follows:

x(%) P(x)

9 ..... 0.05

10 ..... 0.15

11 ..... 0.30

12 ..... 0.20

13 ..... 0.15

14 ..... 0.10

15..... 0.05

a. Verify that P(x) is a probability distribution.

b. What is the probability that returns will be at least 12%?

c. Find the cumulative distribution of returns.

x(%) P(x)

9 ..... 0.05

10 ..... 0.15

11 ..... 0.30

12 ..... 0.20

13 ..... 0.15

14 ..... 0.10

15..... 0.05

a. Verify that P(x) is a probability distribution.

b. What is the probability that returns will be at least 12%?

c. Find the cumulative distribution of returns.

**View Solution:**## Answer to relevant Questions

According to a front-page article in The Wall Street Journal, 30% of all students in American universities miss classes due to drinking.8 If 10 students are randomly chosen, what is the probability that at most 3 of them ...Hedge funds are institutions that invest in a wide variety of instruments, from stocks and bonds to commodities and real estate. One of the reasons for the success of this industry is that it manages expected return and risk ...The deviation of a magnetic needle from the magnetic pole in a certain area in northern Canada is a normally distributed random variable with mean 0 and standard deviation 1.00. What is the probability that the absolute ...The number of votes cast in favor of a controversial proposition is believed to be approximately normally distributed with mean 8,000 and standard deviation 1,000. The proposition needs at least 9,322 votes in order to pass. ...For a normal random variable with mean 16.5 and standard deviation 0.8, find a point of the distribution such that there is a 0.85 probability that the value of the random variable will be above it.Post your question