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Probability that a large company stock will lose money

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Reference no: EM131692561

Question: Based on the research of Ibbotson Associates, a Chicago investment firm, and Prof. Jeremy Siegel of the Wharton School of the University of Pennsylvania, the average return on large-company stocks since 1920 has been 10.5% per year and the standard deviation has been 4.75%. Assuming a normal distribution for stock returns (and that the trend will continue this year), what is the probability that a large company stock you've just bought will make in 1 year at least 12%? Will lose money? Will make at least 5%?

Reference no: EM131692561

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