SCENARIO 6-4 According to Investment Digest, the Arithmetic Mean of the Annual

question 55

Short Answer

SCENARIO 6-4
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 6-4, find the probability that the annual return of a random year will be more than 11.5%.

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Definitions:

Early Payment Discount

A discount offered by a seller to a buyer for paying an invoice ahead of the scheduled due date.

Purchase Discount

A deduction from the amount owed by a buyer to a seller, granted for paying an invoice early.

Early Payment Discount

This is a reduction in the invoice amount offered by a seller to a buyer in return for paying the bill before the scheduled due date.

Sales Discount

A reduction in the price of a product or service that is offered to customers, typically to encourage early payment of invoices or to incentivize bulk purchases.