A portfolio has an expected mean return of 8% and standard deviation of 14%. The probability that its return falls between 8% and 11% is closest to:
- 8.5%.
- 14.8%.
- 58.3%
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
Hi,
The answer should be Option A.
Z = (11 – 8)/14 = 0.2143
Now looking at the Z distribution table we find that p<0.2143 = 0.5832 (i.e. Area in Left region). Therefore, Area from 8% to 11% = 0.5832 – 0.5 = 0.0832 = 8.32% = 8.5% Approx – Option A.
Hope this helps!