You are introduced to an investment that has an expected return of 20% equal to the standard deviation of the distribution of returns.What is the probability that the investment will have a return less than 20% in the first year? Assume a normal distribution.

Question

Quizplus · Accepted Answer

In a normal distribution, the mean (expected return in this case) is the midpoint of the distribution. Therefore, there is a 50% chance that the return will be less than the mean (20% in this scenario).

You Are Introduced to an Investment That Has an Expected