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
Posted: Tue Nov 16, 2021 7:38 am
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: