Math

StatisticsQ&A LibraryThe Capital Asset Pricing Model (CAPM) is a financial model that assumes returns on a portfolio are normally distributed. Suppose a portfolio has an average annual return of 14.7% (i.e. an average gain of 14.7%) with a standard deviation of 33%. A return of 0% means the value of the portfolio doesn’t change, a negative return means that the portfolio loses money, and a positive return means that the portfolio gains money. What percent of years does this portfolio lose money, i.e. have a return less than 0%? What is the cutoff for the highest 15% of annual returns with this portfolio?Question

The Capital Asset Pricing Model (CAPM) is a financial model that assumes returns on a portfolio are normally distributed. Suppose a portfolio has an average annual return of 14.7% (i.e. an average gain of 14.7%) with a standard deviation of 33%. A return of 0% means the value of the portfolio doesn’t change, a negative return means that the portfolio loses money, and a positive return means that the portfolio gains money.

What percent of years does this portfolio lose money, i.e. have a return less than 0%? What is the cutoff for the highest 15% of annual returns with this portfolio?

Tagged in

Find answers to questions asked by student like you

Q: I need help solving as much parts as possible pls

A: Note:Hey, since there are multiple sub-parts question posted, we will answer first three sub-parts a...

Q: Births are approximately uniformly distributed between the 52 weeks of the year. 1 1 sxs53 f(x) = 52

A: Solution:Continuous uniform distribution:A random variable X is said to have the rectangular distrib...

Q: need answers to questions 9 and 10

A: The tree diagram for the three rolls of the die letting C= {composite number rolled} and N={composit...

Q: A pharmaceutical company receives large shipments of ibuprofen tablets and uses this acceptance samp...

A: It is given that X ~B(22,0.06).The PMF of binomial distribution is given by,

Q: The U.S. Census bureau serves as the leading source of quantitative data about the nation’s people a...

A: 1. From the given information,

Q: The caffeine content (in mg) was examined for a random sample of 50 cups of black coffee dispensed b...

A: Given sample size of black coffee cups n = 50Caffeine content mean = 110mgStandard deviation = 7.1 m...

Q: What does it mean for a regression line to be the "best-fit" line.

A: The form of the simple linear regression line is given by,

Q: Sam computed a 90% confidence interval for μ from a specific random sample of size n. He claims that...

A: Sam computed a 90% confidence interval for µ from a specific random sample of size n.

Q: The three-year recidivism rate of parolees in a certain state is about 20%; that is, 20% of paro...

A: Solution:Binomial distribution:The binomial distribution gives the probability of number of successe...

Q: A warehouse employs 24 workers on first shift, 17 workers on second shift, and 14 workers on third...

A: Combination Rule:The arrangement of r objects from n different objects is given by:

Q: Problem 3

A: Preliminary calculation:Using the EXCEL formula “=NORM.S.INV(1-(0.05/2))”, the z-value for 95% confi...

Q: The waiting times between a subway departure schedule and the arrival of a passenger are uniformly d...

A: A uniform distribution has an equal probability for all the outcomes of the random variable, that is...

Q: a manufacturer of bolts have a quality control policy that requires it to destroy any bolts that are...

A: It is given that the mean and standard deviation are 13 and 0.05, respectively.

Q: Exercise 5.7.4 A UMass Boston student has earned 55 credits toward his degree but has a GPA of just ...

A: It is given that the GPA for 55 credits is 1.8.The minimum GPA to obtain is 2.Let G be the required ...

Q: Statistics Question

A: Binomial distribution:The binomial distribution gives the probability of number of successes out of ...

Q: Please see picture

A: Let A be the event that a lot has 5 defective parts and B be the event that a lot has 2 defectiven p...

Q: The US population is 13% African American. If you were to take a SRS of 500 Americans, below what p...

A: From the given data The US population is 13% African American

Q: a psychologist theorized that people can hear better when they have just eaten a large meal. six ind...

A: a.The difference in the mean hearing score is statistically significant for group 1 with N1 = 3, gro...

Q: Possion Distribution The number of calls received by an office on Monday morning between 8:...

A: Here the random variable X, Number of calls between 8.00AM and 9.00 AM follows Poisson distribution ...

Q: I have attached a picture of the question.

A: Hello there! there are more than one question. According to our policies we cannot answer more than ...

Q: Question 1

A: Let mu1 be the sample mean of acute schizophrenics and mu2 be the mean of chronic schizophrenics.Hyp...

Q: A research poll showed that 1282 out of 2040 randomly polled people in a country favor the death pen...

A: Confidence interval:A range of values such that the population parameter can expected to contain for...

Q: Given a population where p = 0.10, find the standard deviation of the samping distribution when n = ...

A: It is given that p is 0.10 and n is 500.

Q: Help

A: The provided information is:

Q: Assume that random guesses are made for eleven multiple choice questions on a medical admissions te...

A: Click to see the answer

Q: An automobile manufacturer finds that 1 in every 2000 automobiles produced has a particular manufact...

A: It is given that n =5,000 and p = 0.0005 (=1/2,000).The probability mass function of binomial distri...

Q: a previous analysis of paper boxes showed that the standard deviation of their lengths is 13 millime...

A: It is given that confidence level is 0.95, standard deviation is 13 and margin of error E is 4.Here,

Q: The article "Facebook Use and Academic Performance Among College Students"† estimated that 87% perce...

A: It is given that the population proportion is 0.87. In the survey the sample proportion van be obtai...

Q: Which of the following groups of scores exhibits the least variability? 2, 4, 6, 8, 10, 12 2, 3, 4...

A: Enter the data in excel as shown below

Q: An investigator wants to estimate the impact of smoking on the incidence of prostate cancer. The inc...

A: Note: Hi there! Thanks for posting the question. It is not clear from your question that what to cal...

Q: In a survey of 909 U.S.adults with children conducted by the financial Industry Regulatory Authority...

A: The hypotheses for the test is given below.Null hypothesis:H0: p = 0.30Alternative hypothesis:H1: p ...

Q: 7.4.46 Question Help When asked whether marriage is becoming obsolete, 758 out of 1968 randomly sele...

A: It is given that 758 out of 1,968 randomly selected adults who responded to a poll said yes. The sam...

Q: Statistics Question

A: Hey there! Thank you for posting the question. Since your question has more than 3 parts, we are sol...

Q: What is tα/2,df for a 95% confidence interval of the population mean based on a sample of 15 observa...

A: Solution: We have to find the t-critical value (tα/2) at the given significance level 1- 0.95=0.05 b...

Q: Assume that the weight loss for the first month of a diet program varies between 6 pounds and 12 pou...

A: Let probability is P and x is random variable.The formula of uniform distribution is:

Q: A simple random sample of size n = 64 is obtained from a population with μ=80 and σ=16. (a) Descri...

A: (a) From the Central Limit Theorem, the sampling distribution of sample mean is normal distribution ...

Q: Given a population where p = 0.10, find the standard deviation of the samping distribution when n = ...

A: It is given that p is 0.10 and n is 2,000.

Q: 3. Suppose a new sample is chosen and you got the following estimated OLS line: predicted birthweigh...

A: 3. From the given information, the predicted OLS line is, biethweight_in_oz =120-3.2 dailycigarettes...

Q: Can you help me with j and k?

A: Solution:The mean is obtained below:The mean is,

Q: Need help with this problem

A: It is given that the mean and standard deviation are $490 and $45, respectively.

Q: Please show TI 84 steps

A: According to the provided information, a fingerprints expert will correctly identify the match 83% o...

Q: Please see picture

A: It is provided that X defined as random variable, follow the distribution of Benford’s Law.a)To show...

Q: 6. Suppose a researcher used data on a group of third year students at MIT to estimate the following...

A: According to the provided information, the fitted regression line is

Q: I cant find an example for how to solve this. Help would be so great! Thank you

A: Margin of error:The formula of margin of error for confidence interval is as follows:

Q: In Hawaii, the rate of motor vehicle theft is 384 thefts per 100,000 vehicles. A large parking struc...

A: Computation of mean, λ:The mean value is calculated as follows:

Q: Grouping individuals into low, middle and high categories implies a scale of which type? Nominal O...

A: Levels of measurement:The variables can be classified based on the values that can be assigned to th...

Q: #3: Let Z bee normally distributed with mean 0 and variance 1. Let Z1,..., Zn be an i.i.d. random sa...

A: Solution:3.a. The moment generating function of Z2 is obtained below:From the given information, z b...

Q: The random variable x is known to be uniformly distributed between 1.0 and 1.5. Show the graph...

A: a. Show the graph of the probability density function of Uniform distribution. From the given inform...

Q: I don't understand how to solve for this. I'm having trouble understanding the percentages

A: Let us define the random variable X as the points for the final exam that are normally distributed w...

Q: A manufacturer of automatic car transmissions uses steel gears. An important characteristic of these...

A: Hi! Thank you for posting the question. Since your question has more than three sub-parts, we have s...