A retirement pension is to be funded by a portfolio of assets the return of which follows a normal distribution with an annual mean and standard deviation of 6% and 12% respectively. It is assumed that no sale of assets is required to pay for the pensions. How likely will next year's funding be met by asset's return if the next year's pension equals 4% of the assets? 

What is the probability if the funding is met in terms of average asset return over 20 years?

Answer rating: 100% (QA)

To determine the probability of next years funding being met by the assets return we need to calculate the probability that the assets return is equal ... View the full answer