Suppose you own a risky asset with an expected return of 16.3 percent and a standard deviation of 31.3 percent.If the returns are normally distributed,the approximate probability of losing 15 percent or more in a single year is ____ percent.
A)2.28
B)4.56
C)15.87
D)31.74
E).26

Question

Quizplus · Accepted Answer

Lower point of 68.26% probability range = 16.3% - 31.3% = -15%Approximate probability of losing 15 percent or more = (100% - 68.26%)/2 = 15.87%

Suppose You Own a Risky Asset with an Expected Return