Suppose That the Returns on an Investment Are Normally Distributed

question 28

Multiple Choice

Suppose that the returns on an investment are normally distributed with an expected return of 8% and standard deviation of 4%.What is the likelihood of making a negative return? (Hint: the area under a curve for 1 std dev is 34.13%,2 std dev is 47.73% and 3 std dev is 49.87%) .

• A)47.73%
• B)34.13%
• C)15.87%
• D)2.27%