A young investment manager tells his client that the probability of making a positive return with his suggested portfolio is 84%. If it is known that returns are normally distributed with a mean of 4.1%, what is the risk, measured by standard deviation, that this investment manager assumes in his calculation?
Q: Risk taking is an important part of investing. In order to make suitable investment decisions on…
A: Solution-: Let, X= The score on the questionnaire Given: μ=49.5,σ=16 ∴X→ N(μ=49.5,σ2=162) We fin x…
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- Risk taking is an important part of investing. In order to make suitable investment decisions on behalf of their customers, portfolio managers give a questionnaire to new customers to measure their desire to take financial risks. The scores on the questionnaire are approximately normally distributed with a mean of 49 and a standard deviation of 16 . The customers with scores in the bottom 5% are described as "risk averse." What is the questionnaire score that separates customers who are considered risk averse from those who are not? Carry your intermediate computations to at least four decimal places. Round your answer to one decimal place.Risk taking is an important part of investing. In order to make suitable investment decisions on behalf of their customers, portfolio managers give a questionnaire to new customers to measure their desire to take financial risks. The scores on the questionnaire are approximately normally distributed with a mean of 51 and a standard deviation of 15 . The customers with scores in the bottom 10% are described as "risk averse." What is the questionnaire score that separates customers who are considered risk averse from those who are not? Carry your intermediate computations to at least four decimal places. Round your answer to one decimal place.Risk taking is an important part of investing. In order to make suitable investment decisions on behalf of their customers, portfolio managers give a questionnaire to new customers to measure their desire to take financial risks. The scores on the questionnaire are approximately normally distributed with a mean of 50.5 and a standard deviation of 16. The customers with scores in the bottom 5% are described as "risk averse. What is the questionnaire score that separates customers who are considered risk averse from those who ar not? Carry your intermediate computations to at least four decimal places. Round your answer to one decimal place. U Continue X S Submit Terms of Use | Privacy Center
- A psychologist is studying the self image of smokers, as measured by the self-image (SI) score from a personality inventory. She would like to examine the mean SI score, μ, for the population of all smokers. Previously published studies have indicated that the mean SI score for the population of all smokers is 82and that the standard deviation is 12, but the psychologist believes that the value for the mean has decreased. She plans to perform a statistical test. She takes a random sample of SI scores for smokers and computes the sample mean to be 7.Based on this information, answer the questions below. What are the null hypothesis (H0) and the alternative hypothesis (H1) that should be used for the test?H0: μ is ?less than less than or equal togreater thangreater than or equal to not equal toequal to ? 82 74 12 H1: μ is ?less thanless than or equal togreater thangreater than or equal tonot equal toequal to ? 82 74 12 In the context of this test, what is a Type II error?A Type…In Professor Friedman's economics course the correlation between the students' total scores prior to the final examination and their final-examination scores is r = 0.5. The pre-exam totals for all students in the course have mean 275 and standard deviation 38. The final-exam scores have mean 75 and standard deviation 6. Professor Friedman has lost Julie's final exam but knows that her total before the exam was 290. He decides to predict her final-exam score from her pre-exam total. (a) What is the slope of the least-squares regression line of final-exam scores on pre-exam total scores in this course? (Round your answer to four decimal places.) What is the intercept? (Round your answer to two decimal places.) (b) Use the regression line to predict Julie's final-exam score. (Round your answer to one decimal place.) -2 (c) Julie doesn't think this method accurately predicts how well she did on the final exam. Use r² to argue that her actual score could have been much higher (or much…A psychologist is studying the self image of smokers, as measured by the self-image (SI) score from a personality inventory. She would like to examine the mean SI score, μ , for the population of all smokers. Previously published studies have indicated that the mean SI score for the population of all smokers is 80 and that the standard deviation is 12 , but the psychologist believes that the value for the mean has decreased. She plans to perform a statistical test. She takes a random sample of SI scores for smokers and computes the sample mean to be 74 . Based on this information, answer the questions below. What are the null hypothesis ( H0 ) and the alternative hypothesis ( H1 ) that should be used for the test? H0 : μ is ?less thanless than or equal togreater thangreater than or equal tonot equal toequal to ?748012 H1 : μ is ?less thanless than or equal togreater thangreater than or equal tonot equal toequal to ?748012In the…
- Risk taking is an important part of investing. In order to make suitable investment decisions on behalf of their customers, portfolio managers give a questionnaire to new customers to measure their desire to take financial risks. The scores on the questionnaire are approximately normally distributed with a mean of 50 and a standard deviation of 14. The customers with scores in the bottom 15% are described as "risk averse." What is the questionnaire score that separates customers who are considered risk averse from those who are not? Carry your intermediate computations to at least four decimal places. Round your answer to one decimal place.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 the distribution is normal with the mean given above. Find the probability that the annual return of a random year will be less than 11.5% 90% 80% 70% 60%The average student loan debt for college graduates is $25,650. Suppose that that distribution is normal and that the standard deviation is $14,350. Let X = the student loan debt of a randomly selected college graduate. Round all probabilities to 4 decimal places and all dollar answers to the nearest dollar.b Find the probability that the college graduate has between $28,800 and $41,400 in student loan debt. c. The middle 20% of college graduates' loan debt lies between what two numbers? Low: $ High: $
- The average student loan debt for college graduates is $25,050. Suppose that that distribution is normal and that the standard deviation is $13,650. Let X = the student loan debt of a randomly selected college graduate. Round all probabilities to 4 decimal places and all dollar answers to the nearest dollar. b Find the probability that the college graduate has between $23,600 and $33,700 in student loan debt. c. The middle 10% of college graduates' loan debt lies between what two numbers? Low: $ ?High: $ ?5. The changes in the values of two investment portfolios are modelled as Normal distributions. From day to day, the first investment portfolio changes in value with mean 2.6% and standard deviation 1.8%. From day to day, the second investment portfolio changes in value with mean 2.2% and standard deviation 2.5%. An investor is hoping for growth of at least 4%. Which portfolio is most likely to give growth of 4%?Risk taking is an important part of investing. In order to make suitable investment decisions on behalf of their customers, portfolio managers give a questionnaire to new customers to measure their desire to take financial risks. The scores on the questionnaire are approximately normally distributed with a mean of 49 and a standard deviation of 16 . The customers with scores in the bottom 15% are described as "risk averse." What is the questionnaire score that separates customers who are considered risk averse from those who are not? Carry your intermediate computations to at least four decimal places. Round your answer to one decimal place.