Assuming that the returns from holding small-company stocks are normally distrib

Question

Assuming that the returns from holding small-company stocks are normally distributed. Assume the average annual return for holding the small-company stocks for a period of time was 17.9 percent and the standard deviation of those stocks for the period was 35.7 percent.

I got A but cannot figure out B.
(a)

What is the approximate probability that your money will double in value in a single year?

Probability 1.07 %

(b)

What is the approximate probability that your money will triple in value in a single year? (Do not include the percent sign (%). Round your answer to 8 decimal places. (e.g., 32.16161616))

Probability %

Explanation / Answer

b. Triple money means 200% return 200% =17.9% + z*35.7% z= 5.100840336 p value for this z score =1 probability that your money will triple in value in a single year = 1-1 = 0%

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