Question: In economic theory, a hurdle rate is the minimum return that a person requires before he or she will make an investment. A research report

In economic theory, a “hurdle rate” is the minimum return that a person requires before he or she will make an investment. A research report says that annual returns from a specific class of common equities are distributed according to a normal distribution with a mean of 12% and standard deviation of 18%. A stock screener would like to identify a hurdle rate such that only 1 in 20 equities is above that value. Where should the hurdle rate be set?

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