A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
10th Edition
ISBN: 9780134753119
Author: Sheldon Ross
Publisher: PEARSON
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Question
Consider this normal distribution graph and the information below for the next
two questions:
Question 8
u- average.
sigma standard deviation.
0.13% 2.14% 13.59% 34.13% 34.13% 13.59% 2.14% 0.13%
Percents are probabilities of being
within the indicated segments of
the X axis.
μ-4σ μ-30 μ-20 μ-o
H+o μ+20 μ+3σμ+40
You have analyzed 30 years of historical, annual returns of Vanguard's VIOO
ETF. VIOO aims to follow the performance of the S&P 600 Small-Cap stock
index. (The S&P 500 is a large-cap index). You found the average return = 10%
and the standard deviation of returns 20%. You plan to model future VIOO
returns (for better or worse) as normally distributed, based on your historical
analysis.
H
Question 9
For example, there is a 34.13%
probability of being between u and
u + sigma
What is the probability that, in any given future year, the VIOO return will be
30% or better? Round your answer to three decimal places.
What is the probability that, in any given future year, the VIOO return will be
-30% or worse? Round your answer to three decimal places.
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Transcribed Image Text:Consider this normal distribution graph and the information below for the next two questions: Question 8 u- average. sigma standard deviation. 0.13% 2.14% 13.59% 34.13% 34.13% 13.59% 2.14% 0.13% Percents are probabilities of being within the indicated segments of the X axis. μ-4σ μ-30 μ-20 μ-o H+o μ+20 μ+3σμ+40 You have analyzed 30 years of historical, annual returns of Vanguard's VIOO ETF. VIOO aims to follow the performance of the S&P 600 Small-Cap stock index. (The S&P 500 is a large-cap index). You found the average return = 10% and the standard deviation of returns 20%. You plan to model future VIOO returns (for better or worse) as normally distributed, based on your historical analysis. H Question 9 For example, there is a 34.13% probability of being between u and u + sigma What is the probability that, in any given future year, the VIOO return will be 30% or better? Round your answer to three decimal places. What is the probability that, in any given future year, the VIOO return will be -30% or worse? Round your answer to three decimal places.
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