Question:
For each investment class in Table 3, assume that future returns are normally distributed with the population mean and standard deviation as given. Based on this assumption:
1. For each investment class, find the probability of a return that is less than zero (that is, find the probability of a loss). Is your answer reasonable for all investment classes? Explain.
2. For each investment class, find the probability of a return that is:
a. Greater than 5%.
b. Greater than 10%.
c. Greater than 20%.
d. Greater than 50%.
3. For which investment classes is the probability of the return greater than 50% is essentially zero? For which investment classes is the probability of such a return greater than 1 percent? Greater than 5%?
4. For which investment classes is the probability of loss is essentially zero?
5. For which investment classes is the probability of loss greater than 1%? Greater than 10%? Greater than 20%?
Table 3
Data on Rate of Return of Investment in Securities
Please provide your work in detail and include in-text citations.
Note:
1. Need to have at least 1 peer-reviewed article as the reference and textbook as the reference
2. Need in-text citation
3. Please find the attachments as the power points of the course for reference.
4. Textbook Information:
Bowerman, B., Drougas, A. M., Duckworth, A. G., Hummel, R. M. Moniger, K. B., & Schur, P. J. (2019). Business statistics and analytics in practice (9th ed.). McGraw-Hill
ISBN 9781260187496
5. Please find the Course Learning Outcome list of this course in the attachment
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