return to risk portfolio analysis Questions 23 24 Thank youS

return to risk portfolio analysis
Questions #23, #24
Thank you

Solution

23.
We need to calculate z value and use z value to calculate pobability from z table available online
Probability (X<0) = Probability (z= (Expected Return - Mean return)/Standard deviation <0)
= Probability (z = (0% - 14%)/7 < 0) = Probability (z =-2 < 0)
By using Z table for value z=-2 we het P(X<0) = 0.0028
So option b is correct

24. Probability (Y<0) = Probability (z= (Expected Return - Mean return)/Standard deviation <0)
= Probability (z = (0% - 9%)/3% < 0) = Probability (z =-3 < 0)
By using Z table for value z=-3 we het P(Y<0) = 0.00135
So option a is correct .

Best of Luck. God Bless