3. In the long run, anqual real returns on common stocks have been normally distributed with mean 10% and standard deviation of 26%. Andrew plans to retire in 45 years and is considering investing in stocks. Answer the following questions assuming that these patterns of variation are expected to continue in the future. A. What is the probability that annual returns on common stocks next year will show a loss (that is, returns will be less than 0%)? B. Andrew thinks the width of the sampling distribution can be used as a measure of risk. What is the standard deviation of the sampling distribution of returns on stocks over the next 45 years? C. What is the probability that the mean annual return on common stocks over the next 45 years will show a loss (that is, the return will be less than 0%)? D. Explain in a few sentences why the results above imply long-term investing is less risky than short-term investing.

3. In the long run, anqual real returns on common stocks have been normally distributed with mean 10% and standard deviation of 26%. Andrew plans to retire in 45 years and is considering investing in stocks. Answer the following questions assuming that these patterns of variation are expected to continue in the future. A. What is the probability that annual returns on common stocks next year will show a loss (that is, returns will be less than 0%)? B. Andrew thinks the width of the sampling distribution can be used as a measure of risk. What is the standard deviation of the sampling distribution of returns on stocks over the next 45 years? C. What is the probability that the mean annual return on common stocks over the next 45 years will show a loss (that is, the return will be less than 0%)? D. Explain in a few sentences why the results above imply long-term investing is less risky than short-term investing.

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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