Normal probability distribution Assuming that the rates of return associated with a given asset investment are normally distributed; that the expected return, r, is 17.2%; and that the coefficient of variation, CV, is 0.86, answer the following questions: a. Find the standard deviation of returns, or. b. Calculate the range of expected return outcomes associated with the following probabilities of occurrence: (1) 68%, (2) 95%, (3) 99%. a. The standard deviation of returns, or, is %. (Round to three decimal places.) b. (1) The lowest possible expected return associated with the 68% probability of occurrence is %. (Round to two decimal places.) The highest possible expected return associated with the 68% probability of occurrence is decimal places.) (2) The lowest possible expected return associated with the 95% probability of occurrence is decimal places.) %. (Round to two %. (Round to two The highest possible expected return associated with the 95% probability of occurrence is decimal places.) %. (Round to two (3) The lowest possible expected return associated with the 99% probability of occurrence is decimal places.) %. (Round to two The highest possible expected return associated with the 99% probability of occurrence is decimal places.) %. (Round to two
Normal probability distribution Assuming that the rates of return associated with a given asset investment are normally distributed; that the expected return, r, is 17.2%; and that the coefficient of variation, CV, is 0.86, answer the following questions: a. Find the standard deviation of returns, or. b. Calculate the range of expected return outcomes associated with the following probabilities of occurrence: (1) 68%, (2) 95%, (3) 99%. a. The standard deviation of returns, or, is %. (Round to three decimal places.) b. (1) The lowest possible expected return associated with the 68% probability of occurrence is %. (Round to two decimal places.) The highest possible expected return associated with the 68% probability of occurrence is decimal places.) (2) The lowest possible expected return associated with the 95% probability of occurrence is decimal places.) %. (Round to two %. (Round to two The highest possible expected return associated with the 95% probability of occurrence is decimal places.) %. (Round to two (3) The lowest possible expected return associated with the 99% probability of occurrence is decimal places.) %. (Round to two The highest possible expected return associated with the 99% probability of occurrence is decimal places.) %. (Round to two
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Normal probability distribution Assuming that the rates of return associated with a given asset investment are
normally distributed; that the expected return, r, is 17.2%; and that the coefficient of variation, CV, is 0.86, answer the
following questions:
a. Find the standard deviation of returns, or.
b. Calculate the range of expected return outcomes associated with the following probabilities of occurrence: (1) 68%,
(2) 95%, (3) 99%.
a. The standard deviation of returns, or, is
%. (Round to three decimal places.)
b. (1) The lowest possible expected return associated with the 68% probability of occurrence is %. (Round to two
decimal places.)
The highest possible expected return associated with the 68% probability of occurrence is
decimal places.)
(2) The lowest possible expected return associated with the 95% probability of occurrence is
decimal places.)
%. (Round to two
%. (Round to two
The highest possible expected return associated with the 95% probability of occurrence is
decimal places.)
%. (Round to two
(3) The lowest possible expected return associated with the 99% probability of occurrence is
decimal places.)
%. (Round to two
The highest possible expected return associated with the 99% probability of occurrence is
decimal places.)
%. (Round to two
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