The historical returns on a balanced portfolio have had an average return of 9% and a standard deviation of 19%. Assume that returns on this portfolio follow a normal distribution. (You may find it useful to reference the z table.) a. What percentage of returns were greater than 47%? (Round your final answer to 2 decimal places.) Percentage of returns % b. What percentage of returns were below -29%? (Round your final answer to 2 decimal places.) Percentage of returns %
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Step 1: First, we need to calculate the Z-score for the given return values using the formula: \[ Z = \frac{(X - \mu)}{\sigma} \] where \( X \) is the value of interest, \( \mu \) is the mean, and \( \sigma \) is the standard deviation. Show more…
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