Question
It has been suggested that an investment portfolio selected randomly by throwing darts at the stock market page of The Wall Street Journal may be
It has been suggested that an investment portfolio selected randomly by throwing darts at the stock market page of The Wall Street Journal may be a sound investment . Suppose that you own such a portfolio of 16 stocks randomly selected from all stocks listed in the NYSE. On a certain day, you hear on the news that the average stock on the NYSE rose 1.5 points.
Assuming the standard deviation of the stock price movements that day was 2 points and assuming stock price movements were normally distributed around their mean of 1.5, what is the probability that the average stock price of your portfolio increased?
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