What is the probability that a stock in the s&p

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Reference no: EM13218456

All the major stock market indexes posted gains in 2010. The mean one-year return for stocks in the S&P 500, a group of 500 very large companies, was 12.8%. The mean one-year return for the NASDAQ, a group of 3,200 small and medium-sized companies, was 16.9%. Historically, the one- year returns are approximately normally distributed, the stan- dard deviation in the S&P 500 is approximately 20%, and the standard deviation in the NASDAQ is approximately 30%.

a. What is the probability that a stock in the S&P 500 lost 20% or more in 2010?

b. What is the probability that a stock in the S&P 500 lost 40% or more in 2010?

Reference no: EM13218456

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