Over the past five years, a stock produced returns of 11 percent, 14 percent, 4 percent, -9 percent, and 5 percent. What is the probability that an investor in this stock will not lose more than 10 percent in any one given year? Greater than .5 but less than 1.0 percent. Greater than 1 percent but less than 2.5 percent. Greater than 2.5 percent but less than 16 percent. Greater than 84 percent but less than 97.5 percent. Greater than 95 percent.
Over the past five years, a stock produced returns of 11 percent, 14 percent, 4 percent, -9 percent, and 5 percent. What is the probability that an investor in this stock will not lose more than 10 percent in any one given year? Greater than .5 but less than 1.0 percent. Greater than 1 percent but less than 2.5 percent. Greater than 2.5 percent but less than 16 percent. Greater than 84 percent but less than 97.5 percent. Greater than 95 percent.
Related questions
Suppose the returns on long-term corporate bonds and T-bills are normally distributed. Assume for a certain time period, long-term corporate bonds had an average return of 6.5% and a standard deviation of 9.3%. For the same period, T-bills had an average return of 5% and a standard deviation of 3.5%. Use the NORMDIST function in Excel® to answer the following questions:
a. What is the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent? Less than 0 percent? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
| Probability of return greater than 10 percent | % |
| Probability of return less than 0 percent | % |
b. What is the probability that in any given year, the return on T-bills will be greater than 10 percent? Less than 0 percent? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
| Probability of T-bill return greater than 10 percent | % |
| Probability of T-bill return less than 0 percent | % |
c. In one year, the return on long-term corporate bonds was â5.4 percent. How likely is it that such a low return will recur at some point in the future? T-bills had a return of 11.32 percent in this same year. How likely is it that such a high return on T-bills will recur at some point in the future? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
| Probability of return on long-term corporate bonds less than â5.4 percent | % |
| Probability of T-bill return greater than 11.32 percent | % |
Suppose the returns on long-term corporate bonds and T-bills are normally distributed. Assume for a certain time period, long-term corporate bonds had an average return of 6.4% and a standard deviation of 9.7%. For the same period, T-bills had an average return of 4.9% and a standard deviation of 3.9%. Use the NORMDIST function in Excel® to answer the following questions:
a. What is the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent? Less than 0 percent? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
| Probability of return greater than 10 percent | ________% |
| Probability of return less than 0 percent | _________% |
b. What is the probability that in any given year, the return on T-bills will be greater than 10 percent? Less than 0 percent? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
| Probability of T-bill return greater than 10 percent | ____% |
| Probability of T-bill return less than 0 percent | _____% |
c. In one year, the return on long-term corporate bonds was â5.1 percent. How likely is it that such a low return will recur at some point in the future? T-bills had a return of 11.22 percent in this same year. How likely is it that such a high return on T-bills will recur at some point in the future? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
| Probability of return on long-term corporate bonds less than â5.1 percent | ___% |
| Probability of T-bill return greater than 11.22 percent | ____% |
