Suppose the average return on asset

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Suppose the average return on Asset A is 6.3 percent and the standard deviation is 7.5 percent and the average return and standard deviation on Asset B are 3.4 percent and 3.0 percent, respectively. Further assume that the returns are normally distributed. Use the NORMDIST function in Excel to answer the following questions

1. In a particular year, the return on Asset A was −4.30 percent. How likely is it that such a low return will recur at some point in the future?

2. Asset B had a return of 10.10 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?

Reference no: EM13908807

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