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In: Finance

1. You hold a portfolio of securities which have had the following annual returns: {4%, 18%,...

1. You hold a portfolio of securities which have had the following annual returns: {4%, 18%, -22%, 0%, 26%, 10%}. You believe that these returns are normally distributed. What is the probability that the return in any given year will exceed the arithmetic mean?

a. 40% b. 55% c. 45% d. 50%

2. You hold a portfolio of securities which have had the following annual returns: {4%, 18%, -22%, 0%, 26%, 10%}. You believe that these returns are normally distributed. What is the probability that the return in any given year will exceed one standard deviation above the mean?

a. 15.87% b. 13.54% c. 14.39% d. 16.87%

3. For any portfolio of securities where returns are normally distributed, what is the probability that the return in any given year will be either greater than 3 standard deviations above the mean or less than 3 standard deviations below the mean?

a. 0.86% b. 0.32% c. 0.26% d. 0.68%

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

JUST WRITTEN IN EXCEL, NO EXCEL FUNCTION IS USED

jeff jeffy answered 2 years ago
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