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

question 85

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 two values that will bound the middle 80% of the annual returns?

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Definitions:

Long-Term Memory

The phase of memory responsible for storing information over extended periods, ranging from days to decades, allowing for retrieval of experiences, knowledge, and skills.

Proactive Interference

The phenomenon where older memories interfere with the recall of new information.

Serial-Order Effect

The tendency of a person to recall the first and last items in a series best, and the middle items worst.

Proactive Interference

A phenomenon where old information inhibits the ability to remember new information.