Problemsuppose the average return on asset a is 69 percent, Ask an Expert

Accounting

Problem:

Suppose the average return on Asset A is 6.9 percent and the standard deviation is 8.9 percent and the average return and standard deviation on Asset B are 3.2 percent and 2.8 percent, respectively. Further assume that the returns are normally distributed. Use the NORMDIST function in Excel® to answer the following questions.

Required:

Question 1: What is the probability that in any given year, the return on Asset A will be greater than 9 percent? Less than 0 percent?

Question 2: What is the probability that in any given year, the return on Asset B will be greater than 9 percent? Less than 0 percent?

Note: Show supporting computations in good form.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167307

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