Find probability that return for common stocks is greater

Assignment Help Basic Statistics
Reference no: EM13120142

According to Investment Digest ("Diversification and the Risk/Reward Relationship", Winter 1994, 1-3), the mean of the annual return for common stocks from 1926 to 1992 was 19.4%, and the standard deviation of the annual return was 24.5%. During the same 67-year time span, the mean of the annual return for long-term government bonds was 5.5%, and the standard deviation was 6.0%. The article claims that the distributions of annual returns for both common stocks and long-term government bonds are bell-shaped and approximately symmetric. Assume that these distributions are distributed as normal random variables with the means and standard deviations given previously.

a. Find the probability that the return for common stocks will be greater than 8%.

b. Find the probability that the return for common stocks will be greater than 20%.

Reference no: EM13120142

Questions Cloud

How much revenue should shaw recognize related : prepare the journal entry (if any) to record the sale on January 2, 2012 shaw prepares an income statement for the first quarter of 2012, ending on March 31, 2012. How much revenue should Shaw recognize related to its sale to ricard?
What is his realized gain or loss : Three years later, the shareholder ssells the land for $220,000. What is his realized gain or loss?
Why do you think that they have made this change : For the longest time, companies offered the employees who stayed with the company for many years a defined pension plan for to help them retire when it was time. That time has since passed and companies now offer a defined contribution plan instea..
Determining algebra-revenue-demand equation : In this problem, we will analyze the profit found for sales of decorative tiles. A demand equation (sometimes called a demand curve) shows how much money people would pay for a product
Find probability that return for common stocks is greater : Assume that these distributions are distributed as normal random variables with the means and standard deviations given previously. Find the probability that the return for common stocks will be greater than 8%.
Solving compound inequality : The number of senior citizens (65 and older) in the US in millions n years after 1990 can be estimated using the formula
Ratios for the two types of inventories : Discuss some possible reasons for differences between these ratios for the two types of inventories. Round answers to one decimal place.
Create confidence interval of true proportion of boys : It was found that in a sample of 215 teenage boys, 59% of them have received speeding tickets. What is the 95% confidence interval of the true proportion of teenage boys who have received speeding tickets?
Graph the inequality between hip and waist sizes : A study concluded that waist to hip ratios are a better predictor of 5-year survival than more traditional height-to-weight ratios.

Reviews

Write a Review

Basic Statistics Questions & Answers

  One time fling-binomial model

Ethics. The one-time fling! Have you ever purchased an article of clothing (dress, sports, jackets, etc.) worn the item once to a party, then returned the purchase?

  Confidence interval for population standard deviation

Pilots who cannot maintain regular sleep hours due to their work schedule often suffer from insomnia. A recent study on sleeping patterns of pilots focused on quantifying deviations from regular sleep hours.

  Estimator or appreciative for the population proportion

The best estimator or appreciative for the population proportion is 0.45. How large must the sample be?

  Test of mean of exercise program

A sample of 45 overweight men participated in an exercise program. At the conclusion of the program 32 had lost weight. At the .05 significance level, can we conclude the program is effective?

  Provide sufficient evidence of mean

Does the sample provide sufficient evidence that the mean pH level in the water differs from 8.5? Conduct a test at the ? = .01 level. What are the upper and lower limits of the 95% confidence intervals?

  One way analysis of variance-anova

Should Katie conduct a between-subject ANOVA or a within-subject ANOVA? Describe your answer.

  Significant effect on aggression using an alpha level

Does drug have significant effect on aggression? Use an alpha level of .05, two tails.

  Recent study of abusing partner physically or sexually

A recent study, "[b]ased on data from a survey of nearly 1,500 Boston men aged 18 to 35 years...found that 16 percent of the men - about one in six -- said they had abused their partner physically or sexually within the past year.

  Normal dostribution of men and womens height

What percentage of men are too tall to fit though a standard doorway without bending, and what percentage of women are too tall to fit through a standard doorway without bending?

  Analysis of food intake and weight gain

Food intake and weight gain. If we increase our food intake, we generally gain weight. Nutrition scientists can calculate the amount of weight gain that would be associated with a given increase in calories.

  Assumptions to apply linear regression

Critically discuss the assumptions, if any, regarding a Chi-square test? What are the assumptions to apply linear regression?

  Lack of randomization

A major problem resulting from the lack of randomization in a cohort study is: the possibility that a factor that led to the exposure, rather than the exposure itself, might have caused the disease.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd