Question
According to Investment Digest, the arithmetic mean of the annual return for common stocks over an 85-year period was 9.5% but the value of the
According to Investment Digest, the arithmetic mean of the annual return for common stocks over an 85-year period was 9.5% but the value of the variance was not mentioned. Also 25% of the annual returns were below 8% while 65% of the annual returns were between 8% and 11.5%. The article claimed that the distribution of annual return for common stocks was bell-shaped and approximately symmetric. Assume that this distribution is normal with the mean given above.
find the probability that the annual return of a random year will be between 7.5% and 11%.
find the mean and standard deviation?
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