The return expected from a risky investment is 24 percent, and the standard deviation of this return is 17 percent.If returns from this investment are normally distributed, what is the probability that the investment may earn a negative rate of return? (Note: Table V is required to work this problem.)
A)8.33%
B)7.93%
C)6.88%
D)5.44%

Question

Quizplus · Accepted Answer

z = (0% - 24%)/17% = - 1.41;From Table V, p = 7.93%

The Return Expected from a Risky Investment Is 24 Percent