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JQH returns are normally distributed

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1. Assume that JQH’s returns are normally distributed. The expected return for JQH is 10% and standard deviation is 5%. What is the probability of a return below 15%?

2. Last year Janet purchased a $1,000 face value corporate bond with an 12% annual coupon rate and a 25-year maturity. At the time of the purchase, it had an expected yield to maturity of 12.85%. If Janet sold the bond today for $989.77, what rate of return would she have earned for the past year?

3. How many years would it take for a debt of $1389 to grow into $3942 if the annual rate is 5.2% with continuous compounding? In this question you will need to solve for t in FV = PVe^rt.

Reference no: EM131869923

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