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Question 6 10 points Save Answer Copy of Digitechs stock has an average expected return of 10.15% and a standard deviation o

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Answer #1

Under normal circumstances, we generally assume stock returns to follow normal distributions.

So, this can be calculated using the normal distribution tables or NORM.DIST function of Excel as shown below

Losing more than 2.65% implies a return of -2.65% Mean 10.15% Standard deviation 12.80% Probability of losing more than 2.65%

Thus the probability is 15.87%

So the correct option is A. 16%

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