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Exercise 6.18 Large-Cap Domestic Stock Fund. The average return for large-cap domestic
stock funds over three years was 14.4%. Assume the three-year returns were normally distributed
across funds with a standard deviation of 4.4%.
What is the probability an individual large-cap domestic stock fund had a three-year return of at
least 20%?
What is the probability an individual large-cap domestic stock fund had a three-year return of 10%
or less?
How big does the return have to be to put a domestic stock fund in the top 10% for the three-year
period?

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Exercise 618 LargeCap Domestic Stock Fund The average ret.pdf

  • 1. Exercise 6.18 Large-Cap Domestic Stock Fund. The average return for large-cap domestic stock funds over three years was 14.4%. Assume the three-year returns were normally distributed across funds with a standard deviation of 4.4%. What is the probability an individual large-cap domestic stock fund had a three-year return of at least 20%? What is the probability an individual large-cap domestic stock fund had a three-year return of 10% or less? How big does the return have to be to put a domestic stock fund in the top 10% for the three-year period?