SCENARIO 6-6 According to Investment Digest,the Arithmetic Mean of the Annual Return

question 73

Short Answer

SCENARIO 6-6
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 this distribution is normal with the mean given above.Answer the following questions without the help of a calculator,statistical software or statistical table.
-Referring to Scenario 6-6,find the probability that the annual return of a random year will be between 7.5% and 11%.

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Definitions:

Postcentral Gyrus

The region of the cerebral cortex located adjacent to the central sulcus, responsible for processing somatosensory information.

Superior Portion

Refers to the upper part of a structure or organ in the body, relative to other components.

Basal Nucleus

A group of neurons located deep within the cerebral hemisphere, involved in the regulation of voluntary motor movements and procedural learning.

Cerebrum

The largest part of the brain, responsible for voluntary activities, sensory perception, thought, reasoning, and memory.