The historical returns on a balanced portfolio have had an average return of 6% and a standard deviation of 11%. Assume that returns on this portfolio follow a normal distribution. Use the empirical rule for normal distributions to answer the following questions. a. What percentage of returns were greater than 28%? (Round your answer to 2 decimal places.) Percentage of returns % b. What percentage of returns were below -5%? (Round your answer to 2 decimal places.)
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28 \) (return of 28%) - \( \mu = 0.06 \) (mean return) - \( \sigma = 0.11 \) (standard deviation) \[ z = \frac{0.28 - 0.06}{0.11} = \frac{0.22}{0.11} = 2 \] Show more…
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