Normal probability distribution Assuming that the rates of return associated with a given asset investment are normally distributed that the expected return, r overbar r , is 11 2 and that the coefficient of variation, CV , is 1 04, answer the followingquestions a Find the standard deviation of returns, sigma Subscript r r b Calculate the range of expected return outcomes associated with the following probabilities of occurrence (1) 68 , (2) 95 , (3) 99

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Question: Normal probability distribution Assuming that the rates of return associated with a given asset investment are normally distributed; that the expected return, r overbar r

Normal probability distributionAssuming that the rates of return associated with a given asset investment are normally distributed; that the expected return,

r overbarr,

11.2%;

and that the coefficient of variation,

CV,

1.04,

answer the followingquestions:

a.Find the standard deviation of returns,

sigma Subscript rr.

b.Calculate the range of expected return outcomes associated with the following probabilities of occurrence: (1) 68%, (2) 95%, (3) 99%.

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