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?

Question

12-11-2019
Business

contestada

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?

Respuesta :

Otras preguntas

Which problems are associated with sickle-cell anemia? A) decrease the ability of red blood cells to carry oxygen. B) will reduce blood circulation. C) increase

What does a jury instruction regarding judicially noticed facts in a criminal case specify? A) The judge's opinion B) The applicable law C) The admissible evide

The location of specific biomes can be predicted based on A. Precipitation and temperature B. The second law of thermodynamics C. The Coriolis effect D. Seasona

What happens as the number innovations that rely on the internet increase?

What is the outside temperature if 4000 kcal of heat is lost through a 4 m pane of 0.30 cm thick glass (k = 2 x 10 kcal/s m c) in one hour from a house kept at

Is a static budget a budget that can't be changed or altered after it is developed? A) True B) False

I need answers to from Princeton to prison: The rise and fall of my American dream commonlit text dependent questions

The equilibrium constant for the reaction H2(g) + I₂(g) 2HI(g) is 32 at a given temperature. The equilibrium concentration of I₂ and HI are 0.5 × 10⁻³M and 8 ×

Which of the following terms refers to the ideals, beliefs, norms, and ethos that arouse an emotional response? a) Ethics b) Morality c) Aesthetics d) Logic

The price of a cardigan is reduced by 6.5% in a sale. The original price of the cardigan was £58. Work out the sale price of the cardigan. Give your answer in p

shahzaibnaeem37 shahzaibnaeem37 · Answer 1 · 2019-11-13T12:38:00+01:00

Answer:

The probability of losing money in the next year by investing in the fund is the probability of getting any return less than 0%. We will use a z test to find out the probability.

So our

Mean= 10%

SD= 21%

Hypothesis X<0

Formula for z value = (X-Mean)/SD

0-0.1/0.21= -0.476

Look up value in z table

=0.3192

31.92%

The probability that you will lose money in the next year by investing in this fund is 0.3192 or 31.92 %

Explanation: