Problemsuppose the returns on an asset are normally, Ask an Expert

Accounting

Problem:

Suppose the returns on an asset are normally distributed. Suppose the historical average annual return for the asset was 5.1 percent and the standard deviation was 14.5 percent.

Requirement:

Question 1: What is the probability that your return on this asset will be less than -8.1 percent in a given year? Use the NORMDIST function in Excel(R) to answer this question.

Question 2: What range of returns would you expect to see 95 percent of the time?

Question 3: What range would you expect to see 99 percent of the time?

Note: Please provide equation and explain comprehensively and give step by step solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91166646

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