Suppose the average return on asset

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Suppose the average return on Asset A is 6.9 percent and the standard deviation is 8.1 percent and the average return and standard deviation on Asset B are 4.0 percent and 3.5 percent, respectively. Further assume that the returns are normally distributed. Use the NORMDIST function in Excel® to answer the following questions.

In a particular year, the return on Asset A was −4.36 percent. How likely is it that such a low return will recur at some point in the future? (Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16))

Asset B had a return of 10.70 percent in this same year. How likely is it that such a high return on Asset B will recur at some point in the future? (Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16))

Reference no: EM13846388

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