Question

A young investment manager tells his client that the probability of making a positive return with his suggested portfolio is 81%. If it is known that returns are normally distributed with a mean of 6.6%, what is the risk, measured by standard deviation, that this investment manager assumes in his calculation? (You may find it useful to reference the z table. Round "z" value and final answer to 3 decimal places.) Standard deviation 

          A young investment manager tells his client that the probability of making a positive return with his suggested portfolio is 81%. If it is known that returns are normally distributed with a mean of 6.6%, what is the risk, measured by standard deviation, that this investment manager assumes in his calculation? (You may find it useful to reference the z table. Round "z" value and final answer to 3 decimal places.)
Standard deviation
Show more…
A young investment manager tells his client that the probability of making a positive return with his suggested portfolio is 81%. If it is known that returns are normally distributed with a mean of 6.6%, what is the risk, measured by standard deviation, that this investment manager assumes in his calculation? (You may find it useful to reference the z table. Round "z" value and final answer to 3 decimal places.) Standard deviation

Added by Emilio M.

Close

Elementary Statistics a Step by Step Approach
Elementary Statistics a Step by Step Approach
Allan G. Bluman 9th Edition
AceChat toggle button
Close icon
Ace pointing down

Please give Ace some feedback

Your feedback will help us improve your experience

Thumb up icon Thumb down icon
Thanks for your feedback!
Profile picture
A young investment manager tells his client that the probability of making a positive return with his suggested portfolio is 81%. If it is known that returns are normally distributed with a mean of 6.6%, what is the risk, measured by standard deviation, that this investment manager assumes in his calculation? (You may find it useful to reference the z table. Round "z" value and final answer to 3 decimal places.) Standard deviation
Close icon
Play audio
Feedback
Powered by NumerAI
Jennifer Stoner Danielle Fairburn
David Collins verified

Kari Hasz and 91 other subject Intro Stats / AP Statistics educators are ready to help you.

Ask a new question
*

Labs

-

Want to see this concept in action?

NEW

Explore this concept interactively to see how it behaves as you change inputs.

View Labs
*

Key Concepts

-
Key Concept
Premium Feature
Explore the core concept behind this problem.
Play button
Key Concept
Premium Feature
Explore the core concept behind this problem.
Your browser does not support the video tag.
*

Recommended Videos

-
a-young-investment-manager-tells-his-client-that-the-probability-of-making-a-positive-return-with-his-suggested-portfolio-is-77-if-it-is-known-that-returns-are-normally-distributed-with-a-me-53045

A young investment manager tells his client that the probability of making a positive return with his suggested portfolio is 77%. If it is known that returns are normally distributed with a mean of 5.8%, what is the risk, measured by standard deviation, that this investment manager assumes in his calculation? (You may find it useful to reference the z table. Round "z" value and final answer to 3 decimal places.)

Ahmet Y.
a-young-investment-manager-tells-his-client-that-the-probability-of-making-a-positive-return-with-his-suggested-portfolio-is-80-if-it-is-known-that-returns-are-normally-distributed-with-a-me-21854

A young investment manager tells his client that the probability of making a positive return with his suggested portfolio is 80%. If it is known that returns are normally distributed with a mean of 5.8%, what is the risk, measured by standard deviation, that this investment manager assumes in his calculation?

Nick J.
a-client-has-an-investment-portfolio-whose-mean-value-is-equal-to-1000000-with-a-standard-deviation-of-30000-he-has-asked-you-to-determine-the-probability-that-the-value-of-his-portfolio-is-72132

A client has an investment portfolio whose mean value is equal to $1,000,000 with a standard deviation of $30,000. He has asked you to determine the probability that the value of his portfolio is between $970,000 and $1,060,000.

Ahmet Y.
*

Recommended Textbooks

-
Elementary Statistics a Step by Step Approach

Elementary Statistics a Step by Step Approach

Allan G. Bluman 9th Edition
achievement 1,506 solutions
The Practice of Statistics for AP

The Practice of Statistics for AP

Daren S. Starnes, Daniel S. Yates, David S. Moore 4th Edition
achievement 1,644 solutions
Introductory Statistics

Introductory Statistics

Barbara Illowsky, Susan Dean 1st Edition
achievement 1,742 solutions
*

Transcript

-
00:01 A young investment manager tells his client that the probability of making a positive return with his suggested portfolio is 81%.
00:07 If it's known that returns are normally distributed with the mean of 6 .6%, what is the risk measured by standard deviation that this investment manager assumes in his calculation? so the probability that z is greater than 0 minus 6 .6 over sigma is equal to 0 .81.
00:28 That's where we're going to start.
00:29 So now we're going to work on solving this.
00:33 So first i'm going to rewrite this as 1 minus the probability that z is less than 0 minus 6 .6 over sigma equals 0 .81.
00:44 So i'm going to subtract the one from each side and then divide out the negative...
Need help? Use Ace
Ace is your personal tutor. It breaks down any question with clear steps so you can learn.
Start Using Ace
Ace is your personal tutor for learning
Step-by-step explanations
Instant summaries
Summarize YouTube videos
Understand textbook images or PDFs
Study tools like quizzes and flashcards
Listen to your notes as a podcast
Continue solving this problem
Create a free account to:
  • View full step-by-step solution
  • Ask follow-up questions with Ace AI
  • Save progress and study later
Continue Free
Numerade

Get step-by-step video solution
from top educators

Continue with Clever
or



By creating an account, you agree to the Terms of Service and Privacy Policy
Already have an account? Log In

A free answer
just for you

Watch the video solution with this free unlock.

Numerade

Log in to watch this video
...and 100,000,000 more!


EMAIL

PASSWORD

OR
Continue with Clever