Consider these long-term investment data: ∙
--The price of a 10-year $100 face value zero-coupon inflation-indexed bond is $84.49.
-- A real-estate property is expected to yield 2% per quarter (nominal) with a SD of the (effective) quarterly rate of 10%.
a. Use the formula in footnote 14 and Excel’s Solver or Goal Seek to find the standard deviation of the continuously compounded annual excess return on the real-estate investment.
b. What is the probability of loss or shortfall after 10 years
