Question: Assuming that the rates of return associated with a given asset investment are normally distributed; that the expected return, r, is 18.9%; and that the

Assuming that the rates of return associated with a given asset investment are normally distributed; that the expected return, rˉ, is 18.9%; and that the coefficient of variation, CV, is 0.75; 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%.

c. Draw the probability distribution associated with your findings in parts a and b.

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