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Suppose That the Returns on an Investment Are Normally Distributed

Question 27

Multiple Choice

Suppose that the returns on an investment are normally distributed with an expected return of 10% and standard deviation of 5%.What is the likelihood of making a positive return? (Hint: the area under a curve for 1 std dev is 34.13%,2 std dev is 47.73% and 3 std dev is 49.87%. )


A) 84.13%
B) 2.27%
C) 97.73%
D) 15.87%

Correct Answer:

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