Question: Using the Ibbotson data on asset returns from Chapter 3 ( Exhibit 3 . 1 1 ) , what percentage of the equity risk premium

Using the Ibbotson data on asset returns from Chapter 3(Exhibit 3.11), what percentage of the equity
risk premium is consumed by trading costs of 1.5 percent? Assuming a normal distribution of
returns, what is the probability that an active manager can earn a return that will overcome these
trading costs?

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