(See Solution) You make an investment. Assume that returns are normally distributed with a mean return of .20 per year and a standard deviation of .10. Suppose
Question: You make an investment. Assume that returns are normally distributed with a mean return of .20 per year and a standard deviation of .10. Suppose you check on your returns once a week. What is the probability that your return is positive for the week? We define the ratio of noise to performance as the coefficient of variation (the ratio of the standard deviation to the mean). Calculate the number of parts of noise per part performance if you check your returns once a week. In this problem, you can assume that weekly returns are independent of each other.
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