A equity had returns of 11%, 1%, 9%, 15%, and -6% for the past ﬁve years.Based on these returns, what is the approximate probability that this equity will earn at least 23% in any one given year?
A)0.5%
B)1.0%
C)2.5%
D)5.0%
E)16.0%

Question

Quizplus · Accepted Answer

The historical returns do not show any year with a return close to 23%. Assuming a normal distribution, the probability of achieving such a high return is low, around 2.5%.

A Equity Had Returns of 11%, 1%, 9%, 15%, and -6