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Suppose that expected return of a stock over the next year is 10% with a volatility...

Suppose that expected return of a stock over the next year is 10% with a volatility of
20% (annual compounding). Moreover, assume that the return of this stock is
normally distributed.
a. What is the probability of the stock returning more than –10%?
b. What is the probability of the stock returning between -10% and +30%?

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Answer #1

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