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

question 149

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 less than 7.5%.

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Definitions:

Change Management

The discipline that guides how to prepare, equip, and support individuals to successfully adopt change in order to drive organizational success and outcomes.

Refreezing

Represents the final stage in Lewin's change management model where new behaviors or changes are solidified into the organizational culture after a change process.

Driving Forces

Factors that motivate and influence the direction of change or progress within an organization or individual.

Urgency

Describes a situation or condition that requires immediate action or attention, often associated with a sense of pressing need or priority.