00:01
In this case, they tell us that portfolio has an average return at 10 % when a standard deviation of 14, which is rather large.
00:09
And they tell us that we must assume that it is a normally distributed.
00:14
So it's a normal distribution.
00:16
So here, to do these, we can, and i suggest that you do, always draw a little bell shape and put your values here.
00:27
So here our mean is 0 .10.
00:30
10 % should be written as 0 .10.
00:33
You never work with numbers as percentage.
00:36
You always convert to decimals.
00:38
And the standard deviation is 0 .14.
00:43
So what they ask us is some percentages, some probabilities.
00:48
So what percentage of returns were greater than 38%.
00:52
So to do that, we must locate where 38 % would be, which is going to be somewhere here to the right, of 10 % of course and they ask us which which of these are greater than 38%.
01:07
So greater than 38 % will be this, well let me do this one this way, this area right here...