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Over a particular period, an asset had an average return of 5
Over a particular period, an asset had an average return of 5.2 percent and a standard deviation of 8.5 percent.
What range of returns would you expect to see 68 percent of the time for this asset? (A negative answer should be indicated by a minus sign. Input your answers from lowest to highest to receive credit for your answers. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
What about 95 percent of the time?
Expert Solution
(1) Computation of Range of Returns for 68% of the time:
Range of Returns for 68 percent of the time = Mean +/- 1 * Standard Deviation
= 5.2% - (1*8.5%) and 5.2% + (1*8.5%)
= -3.30% to 13.70%
(2) Computation of Range of Returns for 95% of the time:
Range of Returns for 95 percent of the time = Mean +/- 2*Standard Deviation
= 5.2% - (2*8.5%) and 5.2% + (2*8.5%)
= -11.80% to 22.20%
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