Assignment:
A financial analyst creates the following probability distribution for the performance of an equity income mutual fund.
| Performance |
Probability |
| Very Poor |
0.14 |
| Poor |
0.43 |
| Neutral |
0.22 |
| Good |
0.16 |
| Very Good |
0.05 |
a. Use 1 = very poor, 2 = poor,... , 5 = very good to depict the above probability distribution graphically. Comment on the optimism or pessimism depicted in the analyst's estimates.
b. Convert the above probability distribution to a cumulative probability representation.
c. What is the probability that this mutual fund will do well?
Provide complete and step by step solution for the question and show calculations and use formulas.