What is the probability that the mean return

Assignment Help Basic Statistics
Reference no: EM132463791

Andrew plans to retire in 32 years. He plans to invest part of his retirement funds in stocks, so he seeks out information on past returns. He learns that over the entire 20th century, the real (that is, adjusted for inflation) annual returns on U.S. common stocks had mean 8.7% and standard deviation 20.2%. The distribution of annual returns on common stocks is roughly symmetric, so the mean return over even a moderate number of years is close to Normal.

(a) What is the probability (assuming that the past pattern of variation continues) that the mean annual return on common stocks over the next 32 years will exceed 12%?

(b) What is the probability that the mean return will be less than 8%?

Reference no: EM132463791

Questions Cloud

Compute the plantwide predetermined overhead rate : Compute the plantwide predetermined overhead rate. Compute the total manufacturing cost assigned to Job 0-70 and Job C-ZOO.
Sensitivity of a point of care testing machine : What is the sensitivity of a point of care testing machine for Hemoglobin A1c taken with blood from a finger stick?
What decision would beverly make if she were optimistic : Develop a payoff (cost) table for this situation. What decision would Beverly make if she were optimistic? What decision would Beverly make if she were pessimis
Y/602/2330 Strategic Planning Assignment : Y/602/2330 Strategic Planning Assignment Help and Solution, BTEC Level 7 Diploma in Strategic Management & Leadership - Assessment Writing Service
What is the probability that the mean return : What is the probability (assuming that the past pattern of variation continues) that the mean annual return on common stocks over the next 32 years will exceed
Calculate the probability of its life expectancy : Selecting one VCR player from this brand at random, calculate the probability of its life expectancy exceeding 7 years.
What is the depreciation expense for the year : What is the depreciation expense for the year 2015 if the corporation uses the units-of-production method of depreciation?The corporation used the machine
What is the probability that a customer service time : What is the probability that a customer's service time is more than 2.78 minutes? (Use lecture notes from last class and your own diligence to solve this proble
What is trevors net pay : What is Trevor's net pay? (Assume an OASDI rate of 6.2%, applicable on the first $118,500 earnings, and a Medicare rate of 1.45%, applicable on all earnings.)

Reviews

Write a Review

Basic Statistics Questions & Answers

  Find the probability that all three like sugar cereals

Three adults are selected at random without replacement. Find the probability that all three like sugar cereals.

  Computing probability density function

A point Y is selected at random from interval (0,1). Then another point X is chosen at random from the interval (0,Y). Find probability density function for X.

  Main reason they watched particular programs

300 randomly selected television viewers were questioned on the main reason they watched particular programs. The results are given below.

  Standard deviation of normal distribution

Suppose 94 percent of the items have lives exceeding 2000 h and 3.51 percent have lives exceeding 16,240 h. Find the mean and standard deviation of the service life.

  There is an issue with treatment side effects individuals

there is an issue with treatment side effects individuals with a certain variant of the fictitous cehs gene suffer

  Would it be unusual for this sample of jawbreakers

The Acme Candy Company claims that 8% of the jawbreakers it produces actually result in a broken jaw. Suppose 9571 Persons are selected at random from those who have eaten a jawbreaker produced at at Acme Candy Company. Would it be unusual for thi..

  Sketch a venn diagram showing the relationship

Carefully sketch a Venn diagram showing the relationship between the events seen in less than 15 minutes and admitted to the hospital, and add probabilities to the appropriate regions.

  What percentage of the population will have scores greater

a very large data set contains aptitude test scores of trainee employees. the population has a mean of 73 and a

  Why is hypothesis testing important

Why is Hypothesis testing important? When is Hypothesis testing most useful?

  An experiment investigated the release of the hormone

An experiment investigated the release of the hormone ACTH from ratpituitary glands under eight treatments: the factorial combinations of CRF (0 or 100 nM; CRF is believed to increase ACTH release), calcium (0 or 2 mM of CaCl2), and Verapamil (0 o..

  Find the correlation coefficient

Plot a scatter diagram. By looking at the scatter diagram, do you expect the correlation coefficient between these two variables to be close to zero, 1, or - 1

  What is the meaning of the 8

The equation of the least squares regression line was Y = 8 - 2X, where Y represents the LOS in days and X the RN/pt ratio.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd