Probabilities for a common stock portfolio

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Probabilities for a Common Stock Portfolio (2).

Recall that, the portfolio mean return estimate was 12 percent and the standard deviation of return estimate was 22 percent per year.

Using these estimates, you want to calculate the following probabilities, assuming that a normal distribution describes returns. (You can use the excerpt from the table of normal probabilities to answer these questions.)

1. What is the probability that portfolio return will exceed 20 percent?

2. What is the probability that portfolio return will be between 12 percent and 20 percent? In other words, what is P(12% =

Reference no: EM13987105

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