An investment broker reports that the yearly returns on common stocks are approximately normally distributed with a

Question:

An investment broker reports that the yearly returns on common stocks are approximately normally distributed with a mean return of 12.4 percent and a standard deviation of 20.6 percent. On the other hand, the firm reports that the yearly returns on tax- free municipal bonds are approximately normally distributed with a mean return of 5.2 percent and a standard deviation of 8.6 percent. Find the probability that a randomly selected

a. Common stock will give a positive yearly return.

b. Tax- free municipal bond will give a positive yearly return.

c. Common stock will give more than a 10 percent return.

d. Tax-free municipal bond will give more than a 10 percent return.

e. Common stock will give a loss of at least 10 percent.

f. Tax-free municipal bond will give a loss of at least 10 percent.

Common Stock
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