SOLUTION: Suppose that the annual rate of return for a common biotechnology stock is normally distributed with a mean of 4% and a standard deviation of 4% . Find the probability that the on
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Question 128880: Suppose that the annual rate of return for a common biotechnology stock is normally distributed with a mean of 4% and a standard deviation of 4% . Find the probability that the one-year return of this stock will be positive. Round your answer to at least four decimal places. Answer by stanbon(75887) (Show Source):
You can put this solution on YOUR website! Suppose that the annual rate of return for a common biotechnology stock is normally distributed with a mean of 4% and a standard deviation of 4% . Find the probability that the one-year return of this stock will be positive. Round your answer to at least four decimal places.
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Find the z-score of zero:
z(0) = (0-0.04)/(0.04) = -0.04/0.04 = -1
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P(p>0)= P(z>-1) = 0.8413...
Cheers,
Stan H.
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