Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 6.6 percent and the standard deviation was 16.5 percent. a. What is the probability that your return on this asset will be less than -8.5 percent in a given year? Use the NORMDIST function in Excel to answer this question. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What range of returns would you expect to see 95 percent of the time? Note: Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. c. What range of returns would you expect to see 99 percent of the time? Note: Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a. Probablility b. 95% level c. 99% level % % % to to % %
Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 6.6 percent and the standard deviation was 16.5 percent. a. What is the probability that your return on this asset will be less than -8.5 percent in a given year? Use the NORMDIST function in Excel to answer this question. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What range of returns would you expect to see 95 percent of the time? Note: Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. c. What range of returns would you expect to see 99 percent of the time? Note: Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a. Probablility b. 95% level c. 99% level % % % to to % %
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...
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Transcribed Image Text:Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 6.6 percent and the
standard deviation was 16.5 percent.
a. What is the probability that your return on this asset will be less than -8.5 percent in a given year? Use the NORMDIST function
in Excel® to answer this question.
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
b. What range of returns would you expect to see 95 percent of the time?
Note: Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do
not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
c. What range of returns would you expect to see 99 percent of the time?
Note: Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do
not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
a. Probablility
b. 95% level
c. 99% level
%
%
%
to
to
%
%
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