The average return for large-cap domestic stock funds over three years 2009-2011 was 14.4% (AAII Journal, February, 2012). Suppose the three-year returns were normally distributed across funds with standard deviation of 4.4%.
a. Determine the probability an individual large-cap domestic stock fund had a three-year return of at least 20% (to 4 decimals)?
b. What is the probability an individual large-cap domestic stock fund had a three-year return of 10% or less (to 4 decimals)?
c. How big does the return have to be to put a domestic stock fund in the top 10% for the three-year period (to 2 decimals)?