Suppose the returns on an asset are normally distributed. The historical average annual return for the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 6.5 percent and the standard deviation was 8.5 percent. a. What is the probability that your return on this asset will be less than -6.9 percent in a given year? Use the NORMDIST function in Excel® to answer this question. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What range of returns would you expect to see 95 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c. What range of returns would you expect to see 99 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a. Probablility % to % b. 95% level c. 99% level to Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 6.5 percent and the standard deviation was 8.5 percent. a. What is the probability that your return on this asset will be less than -6.9 percent in a given year? Use the NORMDIST function in Excel® to answer this question. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What range of returns would you expect to see 95 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c. What range of returns would you expect to see 99 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a. Probablility % to % b. 95% level c. 99% level to
Expert Answer:
Related Book For
Fundamentals of corporate finance
ISBN: 978-0073382395
9th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
Posted Date:
Students also viewed these accounting questions
-
In what types of industry would you expect to see substantial learning by doing? Why?
-
a what is the probability that the person responded Increase oil, gas and coal b what is the probability that the person responded Equally important or had no opinion Suppose we select three people...
-
In what types of stores would you expect to find ( a ) convenience products, ( b ) shopping products, ( c ) specialty products, and ( d ) unsought products?
-
You are given the following as it relates to the price of a pound of flour in Adam Island, 2016 to 2022: 2016-$1.35 2017 - $1.50 2018 - $1.65 2019 - $1.85 2020 - $2.15 2021 - $2.00 2022 - $2.10 Using...
-
In its most recent annual report, Sunrise Enterprises reported current assets of $1,090,000 and current liabilities of $602,000. Required: Determine for each of the following transactions whether the...
-
Correct any modifier problems in the sentences below. In the second debate, the councilwoman made her points much stronger than she did in the first one.
-
A DC motor-drive system has a comparator. The comparators job is to compare the existing speed of the motor with the requested speed. The motor speed is transmitted from a tachometer on the outboard...
-
The PCAOB has proposed changes to the auditor's report for public companies that include requirements for the auditor to communicate "critical audit matters." Critical audit matters include those...
-
Use the 2012 marginal tax rates to compute the tax owed by the following person. Round taxable income to the nearest dollar as needed. A single woman with a taxable income of $13,000 and a $3000 tax...
-
The adjusted trial balance of Carla Vista Supply Company included the following selected accounts: Sales Revenue Sales Returns and Allowances Sales Discounts Cost of Goods Sold Freight-Out...
-
Read the scenario below and list five (5) strategies that the educators are using to guide the childrens behaviour. You may like to refer to the reading 'Guiding Children's Behaviour' by Louise...
-
Form 10-K is filed with the SEC to update the information a company supplied when filing a registration statement under the Securities and Exchange Act of 1934. Form 10-K is a report that is filed by...
-
In the registration and sales of new securities issues, the SEC a. Endorses a securitys investment merit by allowing its registration to go effective. b. Provides a rating of the investment quality...
-
Regulation S-K disclosure requirements of the SEC deal with the companys business, properties, and legal proceedings; selected five-year summary financial data; managements discussion and analysis of...
-
The SECs Regulation S-X disclosure requirements address a. Changes in and disagreements with accountants on accounting and financial disclosure. b. Managements discussion and analysis of the...
-
Formation and meaningful utilization of an audit committee of the board of directors is required of publicly traded companies that are subject to the rules of the a. Securities and Exchange...
-
This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Three seconds after automobile B passes through the intersection shown, automobile A passes...
-
Which of the following is FALSE regarding the purchasing power parity (PPP). a. The PPP is a manifestation of the law of one price b. The PPP says that a country with a higher expected inflation can...
-
Grohl Co. issued 11-year bonds a year ago at a coupon rate of 6.9 percent. The bonds make semiannual payments. If the YTM on these bonds is 7.4 percent, what is the current bond price?
-
Are the following statements true or false? Explain why. a. If the general price index in Great Britain rises faster than that in the United States, we would expect the pound to appreciate relative...
-
a. Can you describe the trade-off that defines the static theory of capital structure? b. What are the important factors in making capital structure decisions?
-
Basic Chemicals Ltd produces a highly flammable chemical product. The company experienced a flood on 1 April 2025 that destroyed its entire work in process inventory but did not affect the raw...
-
Cold Appliances Pty Ltd makes refrigerators and is trying to determine the cost of its ending work in process. The accountant has put together the following data for the year ended 30 June 2025. Each...
-
An apparatus for measuring thermal conductivity employs an electrical heater sandwiched between two identical samples of diameter \(25 \mathrm{~mm}\) and length \(60 \mathrm{~mm}\), which are pressed...
Study smarter with the SolutionInn App