I actually have no idea how to do this ? Can someone explain it to me ??????
An investment strategy has an expected return of 9 percent and a standard deviation of 5 percent. Assume investment returns are bell shaped.
a.
How likely is it to earn a return between 4 percent and 14 percent? (Round your answer to 2 decimal places.)
Probability =
b.
How likely is it to earn a return greater than 14 percent? (Round your answer to 2 decimal places.)
Probability =
c.
How likely is it to earn a return below −1 percent? (Round your answer to 3 decimal places.)
Probability =
http://i65.tinypic.com/dqg9io.jpg Look at this bell curve to help
a 9% + or - 5 IS 4 and 14 and this is + or - ONE standard deviation From the graph you can see that 68% will fall in this range (34 +34)
b. 14+2 = 16%
c. That is TWO standard deviations from 9 9 -5-5 = -1 Look at the graph 2% are less than this
