Returns and the bell curve


Problem 1: Returns and the Bell Curve

An investment has an expected return of 8 percent per year with a standard deviation of 4 percent. Assuming that the returns on this investment are at least roughly normally distributed, how frequently do you expect to lose money?

Problem 2: Using Returns Distributions

Based on the historical record, if you invest in long- term U. S. Treasury bonds, what is the approximate probability that your return will be less than 6.0 percent in a given year? What range of returns would you expect to see 95 percent of the time? 99 percent of the time?

Solution Preview :

Prepared by a verified Expert
Finance Basics: Returns and the bell curve
Reference No:- TGS01834951

Now Priced at $25 (50% Discount)

Recommended (99%)

Rated (4.3/5)