The Capital Asset Pricing Model is a financial model that assumes returns on a portfolio are normally distributed. Suppose a portfolio has an average annual return of 14.7% (i.e. an average gain of 14.7%) with a standard deviation of 33%. A return of 0% means the value of the portfolio doesn't change, a negative return means that the portfolio loses money, and a positive return means that the portfolio gains money.
(a) What percent of years does this portfolio lose money, i.e. have a return less than 0%?
(b) What is the cutoff for the highest 15% of annual returns with this portfolio?