For each investment class in Table 3.11 (page 143), assume that future returns are normally distributed with
Question:
a. For each investment class, find the probability of a return that is less than zero (that is, find the probability of a loss). Is your answer reasonable for all investment classes? Explain.
b. For each investment class, find the probability of a return that is
(1) Greater than 5 percent.
(2) Greater than 10 percent.
(3) Greater than 20 percent.
(4) Greater than 50 percent.
c. For which investment classes is the probability of a return greater than 50 percent essentially zero? For which investment classes is the probability of such a return greater than I percent? Greater than 5 percent?
d. For which investment classes is the probability of a loss essentially zero? For which investment classes is the probability of a loss greater than 1 percent? Greater than 10 percent? Greater than 20 percent?
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Related Book For
Business Statistics In Practice
ISBN: 9780073401836
6th Edition
Authors: Bruce Bowerman, Richard O'Connell
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