Explore BrainMass
Share

# Statistical Analysis: Annual Return

1. Suppose the annual return on XYZ stock follows a normal distribution with mean 0.12 and standard
deviation 0.30.

a. What is the probability that XYZ's value will decrease during a year?

b. What is the probability that the return on XYZ during a year will be at least 20%?

c. What is the probability that the return on XYZ during a year will be between -6% and 9%?

d. There is a 5% chance that the return on XYZ during a year will be greater than what value?

e. There is a 1% chance that the return on XYZ during a year will be less than what value?

f. There is a 95% chance that the return on XYZ during a year will be between which two values (equidistant from the mean)?

#### Solution Preview

Please see the attached excel book for more detailed calculations.
1. Suppose the annual return on XYZ stock follows a normal distribution with mean 0.12 and standard deviation 0.30.

a. What is the probability that XYZ's value will decrease during a year?
Z=(0-0.12)/0.30=-0.40
P(z<-0.40)=0.3446

b. What is the probability that ...

#### Solution Summary

The following posting helps with statistical analysis problems.

\$2.19