SOLUTION: An investment broker reports that the yearly returns on common stocks are approximately normally distributed with a mean return of 12.4 percent and a standard deviation of 20.6 per
Algebra ->
Probability-and-statistics
-> SOLUTION: An investment broker reports that the yearly returns on common stocks are approximately normally distributed with a mean return of 12.4 percent and a standard deviation of 20.6 per
Log On
Question 1147613: An investment broker reports that the yearly returns on common stocks are approximately normally distributed with a mean return of 12.4 percent and a standard deviation of 20.6 percent.
Find the probability that a randomly selected
Common stock will give a positive yearly return.
Common stock will give more than a 10 percent return.
What percent of yearly returns are at or below the 10th percentile of the distribution of yearly returns? What percentage are at or above the 10th percentile? Find the 10th percentile of the distribution of yearly returns.
You can put this solution on YOUR website! z=(x-mean)/sd
>(x-12.4)/20.6
>(0-12.4)/20.6
>-0.60
That probability is 0.7258
more than 10% return
z>(10-12.4)/20.6
>0.12
That probability is 0.4522
10%ile is z=-1.28
That value is -1.28=(x-mean)/20.6 or -26.64=x-12.4 or x=-14.24 per cent
10% or the returns are below the tenth percentile; 90 per cent are above it.
