Respuesta :
Answer:
0.500 is the probability that your return on this asset will be less than 4.9 percent in a given year.
Step-by-step explanation:
We are given the following information in the question:
Mean, μ = 4.9 percent
Standard Deviation, σ = 10.4 percent
We are given that the distribution of returns on an asset is a bell shaped distribution that is a normal distribution.
Formula:
[tex]z_{score} = \displaystyle\frac{x-\mu}{\sigma}[/tex]
a) P(return on this asset will be less than 4.9 percent)
P(x < 4.9)
[tex]P( x < 4.9) = P( z < \displaystyle\frac{4.9 - 4.9}{10.4}) = P(z < 0)[/tex]
Calculation the value from NORM-DIST function in Excel, we have,
[tex]P(x < 4.9) = 0.500 = 50.00\%[/tex]
0.500 is the probability that your return on this asset will be less than 4.9 percent in a given year.
