[Ch.6 Normal Distribution] The average return on large-cap stocks is 10%. The returns on large-cap stocks is normally distributed with standard deviation of 5%What return does a large-cap stock need in order to be in the top-5%?

Determine the value of return that a large-cap stock needed in order to be in the top-5%. The…

Answered: [Ch.6 Normal Distribution] The average…

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018

18th Edition

ISBN:9780079039897

Author:Carter

Publisher:Carter

Chapter4: Equations Of Linear Functions

Section4.5: Correlation And Causation

Problem 2CYU

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[Ch.6 Normal Distribution] The average return on large-cap stocks is 10%. The returns on large-cap stocks is normally distributed with standard deviation of 5%
1. What return does a large-cap stock need in order to be in the top-5%?

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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