In economic theory, a hurdle rate is the minimum return that a person requires before he or

Question:

In economic theory, a “hurdle rate” is the minimum return that a person requires before he or she will make an investment. A research report says that annual returns from a specific class of common equities are distributed according to a normal distribution with a mean of 12% and standard deviation of 18%. A stock screener would like to identify a hurdle rate such that only 1 in 20 equities is above that value. Where should the hurdle rate be set?

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...