Question
1.You are thinking about investing in the Ford Motor Company and have been tracking their month end closing prices for the past 5 months.($10.89, $11.82,
1.You are thinking about investing in the Ford Motor Company and have been tracking their month end closing prices for the past 5 months.($10.89, $11.82, $12.12, $12.07 and $12.10) You plan to buy the stock for $12.10 and hold it for 1 month as long as you are 97.5% confident that you won't lose more than $1.50/share.Should you buy the stock?
a.Yes, because the stock price has not been below $10.89 for the last 5 months
b.No, because the standard deviation is too high
c.Yes, because the average is $11.80
d.Yes, because the normal curve tells us that there is only a 2.5% chance that the stock will drop below $10.75 in a month.
e.Can't tell from the information provided
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