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Average Stock Prices for Companies

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The average stock price for companies making up the s&p 500 is $30, and the standard deviation is $8.20. assume the stock prices are normally distributed.

a. what is the probability a company will have a stock price of at least $40?
b. what is the probability a company will have a stock price for no higher than $20?
c. how high does a stock price have to be to put a company to the top 10%?

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Solution Summary

The average stock prices for companies are determined.

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Assume that the stock price is X. Let Y = (X - 30) / 8.2, then X = 8.2Y + 30 and Y is standard normal distributed.
(a) P(X >= ...

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