What is the probability that the mean return

Assignment Help Basic Statistics
Reference no: EM132463791

Andrew plans to retire in 32 years. He plans to invest part of his retirement funds in stocks, so he seeks out information on past returns. He learns that over the entire 20th century, the real (that is, adjusted for inflation) annual returns on U.S. common stocks had mean 8.7% and standard deviation 20.2%. The distribution of annual returns on common stocks is roughly symmetric, so the mean return over even a moderate number of years is close to Normal.

(a) What is the probability (assuming that the past pattern of variation continues) that the mean annual return on common stocks over the next 32 years will exceed 12%?

(b) What is the probability that the mean return will be less than 8%?

Reference no: EM132463791

Questions Cloud

Compute the plantwide predetermined overhead rate : Compute the plantwide predetermined overhead rate. Compute the total manufacturing cost assigned to Job 0-70 and Job C-ZOO.
Sensitivity of a point of care testing machine : What is the sensitivity of a point of care testing machine for Hemoglobin A1c taken with blood from a finger stick?
What decision would beverly make if she were optimistic : Develop a payoff (cost) table for this situation. What decision would Beverly make if she were optimistic? What decision would Beverly make if she were pessimis
Y/602/2330 Strategic Planning Assignment : Y/602/2330 Strategic Planning Assignment Help and Solution, BTEC Level 7 Diploma in Strategic Management & Leadership - Assessment Writing Service
What is the probability that the mean return : What is the probability (assuming that the past pattern of variation continues) that the mean annual return on common stocks over the next 32 years will exceed
Calculate the probability of its life expectancy : Selecting one VCR player from this brand at random, calculate the probability of its life expectancy exceeding 7 years.
What is the depreciation expense for the year : What is the depreciation expense for the year 2015 if the corporation uses the units-of-production method of depreciation?The corporation used the machine
What is the probability that a customer service time : What is the probability that a customer's service time is more than 2.78 minutes? (Use lecture notes from last class and your own diligence to solve this proble
What is trevors net pay : What is Trevor's net pay? (Assume an OASDI rate of 6.2%, applicable on the first $118,500 earnings, and a Medicare rate of 1.45%, applicable on all earnings.)

Reviews

Write a Review

Basic Statistics Questions & Answers

  Find the expected number of yellow balls drawn

Suppose we have an urn containing c yellow balls and d green balls. We draw k balls, without replacement, from the urn. Find the expected number of yellow balls drawn

  Use a standard deviation 30 mgdl and find a 99 confidence

suppose the average cholesterol level of children ages 2-14 is 175 mgdl with a standard deviation 30 mgdl. recently

  Characterize the lifetime of a new brand

To characterize the lifetime of a new brand of energy-saving light bulbs, a sample of 10 were tested in a specially designed facility  where they could be left on continuously and monitored electronically to record the precise number of hours unti..

  Normal population with hypothesized mean

Consider a random sample of size 28 from a normal population with hypothesized mean µ0 = 9.96.

  Compute the frequency and length of phone calls

Internet telephone calls You can use Voice over Internet Protocol (VoIP) to make long-distance calls over the Internet.

  Determine the posterior odds favoring h

A research group is contemplating purchase of a new software package to perform some specialized calculations.

  Why are absolute value signs used in two-tail probability

The tail probabilities given above be affected if the > signs in the inequalities were replaced by ? Explain briefly. Why are the absolute value signs used in the two-tail probability expressions above?

  Various characteristics of job satisfaction

The relationship between hospital patient-to-nurse ratio and various characteristics of job satisfaction and patient care has been the focus of a number

  Group of events of different possibility

Finding the probability of each event in a group of events of different possibility

  Main challenges faced by the upstate new york veterans

Identify and briefly explain the main challenges faced by the Upstate New York Veterans Healthcare Network's top and middle managers in the innovation.

  Celebration of columbus day

What is the conflict that exists between the celebration of Columbus Day while some opponents think it should be replaced by Indigenous People's Day?

  Find the middle range for the age of magazines subscribers

Find the middle 80% range (i.e. range that is symmetrical about the mean) for the age of its subscribers.rs. What proportion of Mogul's newsstand customers have ages in the range computed above?

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