Question
There is some speculation that a simple name change can result in a short-term increase in the price of certain business firms' stocks (relative to
There is some speculation that a simple name change can result in a short-term increase in the price of certain business firms' stocks (relative to the prices of similar stocks). Suppose that to test the profitability of name changes, we analyze the stock prices of a large sample of corporations shortly after they changed names, and we find that the mean relative increase in stock price was about
0.85
%
, with a standard deviation of
0.18
%
. Suppose that this mean and standard deviation apply to the population of all companies that changed names. Complete the following statements about the distribution of relative increases in stock price for all companies that changed names.
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