Question

The historical returns on a portfolio had an average return of 8 percent and a standard deviation of 12 percent. Assume that returns on this portfolio follow a bell-shaped distribution.What percentage of returns were greater than 20 percent?

Answer 1

Answer:

percentage of returns is 16%

Explanation:

given data

average return μ = 8 percent

standard deviation σ = 12 percent

x = 20

solution

we get here

z = $\frac{x-\mu }{\sigma }$     ......................1

put here value and we will get

z =  $\frac{(20 - 8)}{12}$  

z  = 1  

so here

P(x > 12) = P(z > 1)

= 0.1587 = 16%