Question: The capital Asset pricing model ( CAPM ) is a financial model that assumes returns on a portfolio are normally distributed. suppose a portfolio has
The capital Asset pricing model CAPM is a financial model that assumes returns on a portfolio are normally distributed. suppose a portfolio has an average annual return of ie an average gain of with a standard deviation of A return of means the value of the portfolio doesnt change, a negative return means that the portfolio loses money, and a positive return means that the portfolio gains money. a what is the probability of this portfolio gaining money between and b what is the cutoof for the highest of annual returns with this portfolio ieth percentile
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