The Annual Return of a Well-Known Mutual Fund Has Historically

question 47

Short Answer

The annual return of a well-known mutual fund has historically had a mean of about 10% and a standard deviation of 21%. Suppose the return for the following year follows a normal distribution, with the historical mean and standard deviation. What is the probability that you will lose money in the next year by investing in this fund?

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Definitions:

Sound Waves

Vibrations that travel through air or another medium and can be heard when they reach a person's or animal's ear.

Eardrum Vibrate

The movement of the tympanic membrane in response to sound waves, enabling the perception of sound.

Macro-Listening

The practice of understanding the overall context and patterns in spoken communication, beyond individual words or phrases.

Evaluative Questions

Questions designed to assess the respondent's knowledge, understanding, or decision-making process, often reflective and analytical.