Question

Assume the returns from holding small-company stocks are normally distributed. Also assume the average annual return for holding the small-company stocks for a period of time was 16.2 percent and the standard deviation of those stocks for the period was 31.3 percent. Use the NORMDIST function in Excel® to answer the following questions.

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

Answer 1

The approximate probability that your money will double in value in a single year is 11.28%, and the approximate probability that your money will triple in value in a single year is 2.37%.

Step-by-step explanation: