TABLE 6-4 According to Investment Digest, the arithmetic mean of the annual return for common stocks from...

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Basic Math

TABLE 6-4
According to Investment Digest, the arithmetic mean of theannual return for common stocks from 1926-2010 was 9.5% but thevalue of the variance was not mentioned. Also 25% of the annualreturns were below 8% while 65% of the annual returns were between8% and 11.5%. The article claimed that the distribution of annualreturn for common stocks was bell-shaped and approximatelysymmetric. Assume that this distribution is normal with the meangiven above. Answer the following questions without the help of acalculator, statistical software, or statistical table.
15) Referring to Table 6-4, find the probability that the annualreturn of a random year will be less than 11.5%.__?
16) Referring to Table 6-4, find the probability that the annualreturn of a random year will be more than 11.5%_?
17) Referring to Table 6-4, find the probability that the annualreturn of a random year will be between 7.5% and 11%.__?
18) Referring to Table 6-4, what is the value above which willaccount for the highest 25% of the possible annualreturns?_
19) Referring to Table 6-4, 75% of the annual returns will belower than what value?_______

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Arithmetic mean of the annual return 95The annual return below 8 is 25And we know that the distribution is symmertric so the value atabove 11 will also be 25 As the difference between 8 to 95 and95 to See Answer

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TABLE 6-4 According to Investment Digest, the arithmetic mean of the annual return for common stocks from...

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Basic Math

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