Q1. Suppose you own an S&P 500 index fund, and the historical average yearly return on the S&P index is about 13%, with
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Q1. Suppose you own an S&P 500 index fund, and the historical average yearly return on the S&P index is about 13%, with
Q1. Suppose you own an S&P 500 index fund, and the historical average yearly return on the S&P index is about 13%, with a standard deviation of 20%. Assume the return follows normal distribution. 1.1 What is the probability of a return of -7% or worse next year? 1.2 What is the probability of a loss of 30% or more over the next two years? 1.1. Answer: 1.2. Answer:
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