A young investment manager tells his client that the probability of making a positive return with...
A young investment manager tells his client that the probability of making a positive return with his suggested portfolio is 75%. If it is known that returns are normally distributed with a mean of 4.8%, what is the risk, measured by standard deviation, that this investment manager assumes in his calculation? (You may find it useful to reference the z table. Round "z" value and final answer to 3 decimal places.)
Homework Answers
For normal distribution, P(X < A) = P(Z < (A - 
)/
)
Here, = 4.8%
P(X > 0) = 0.75
P(X < 0) = 1 - 0.75 = 0.25
P(Z < (0 - 4.8)/) = -0.674
-4.8)/ = -0.674
=
7.122%
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A young investment manager tells his client that the probability
of making a positive return with...
A young investment manager tells his client that the probability of making a positive return with...
A young investment manager tells his client that the probability of making a positive return with his suggested portfolio is 95%. If it is known that returns are normally distributed with a mean of 5.8%, what is the risk, measured by standard deviation, that this investment manager assumes in his calculation? (You may find it useful to reference the z table. Round "z" value and final answer to 3 decimal places.)
A young investment manager tells his client that the probability of making a positive return with...
A young investment manager tells his client that the probability of making a positive return with his suggested portfolio is 94%. If it is known that returns are normally distributed with a mean of 6.2%, what is the risk, measured by standard deviation, that this investment manager assumes in his calculation? (Round "z" value to 2 decimal places and final answer to 2 decimal places.)
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3-self contained/stand-alone
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