SCENARIO 6-5 According to Investment Digest, the Arithmetic Mean of the Annual

question 75

Short Answer

SCENARIO 6-5
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 6-5, 10% of the annual returns will be less than what amount?

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Definitions:

Moral Development

The growth in an individual's understanding, reasoning, and application of ethics over time.

Obedience

The act of following commands or instructions from authority, often studied in psychology.

Self-Interest

Actions or considerations primarily aimed at one's own benefits or well-being.

Ethical Decision-Making Approach

describes a process that involves evaluating and choosing among alternatives in a manner consistent with ethical principles and values.