a. What is the probability an individual large-cap domestic stock fund had a three-year return of at least 20% (to 4 decimals)? b. What is the probability an individual large-cap domestic stock fund had a three-year return of 10% or less (to 4 decimals)? c. How big does the return have to be to put a domestic stock fund in the top 10% for the three-year period (to 2 decimals)? %

A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
icon
Related questions
Topic Video
Question
The average return for large-cap domestic stock funds over the three years 2009–2011 was 14.3%. Assume the three-year returns were normally distributed across funds with a standard deviation of 4.5%.
Use Table 1 in Appendix B.
a. What is the probability an individual large-cap domestic stock fund had a three-year return of at least 20% (to 4 decimals)?
b. What is the probability an individual large-cap domestic stock fund had a three-year return of 10% or less (to 4 decimals)?
c. How big does the return have to be to put a domestic stock fund in the top 10% for the three-year period (to 2 decimals)?
%
Transcribed Image Text:The average return for large-cap domestic stock funds over the three years 2009–2011 was 14.3%. Assume the three-year returns were normally distributed across funds with a standard deviation of 4.5%. Use Table 1 in Appendix B. a. What is the probability an individual large-cap domestic stock fund had a three-year return of at least 20% (to 4 decimals)? b. What is the probability an individual large-cap domestic stock fund had a three-year return of 10% or less (to 4 decimals)? c. How big does the return have to be to put a domestic stock fund in the top 10% for the three-year period (to 2 decimals)? %
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Discrete Probability Distributions
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, probability and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
Probability
ISBN:
9780134753119
Author:
Sheldon Ross
Publisher:
PEARSON
A First Course in Probability
A First Course in Probability
Probability
ISBN:
9780321794772
Author:
Sheldon Ross
Publisher:
PEARSON