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

question 159

Short Answer

TABLE 6-6
According to Investment Digest, the arithmetic mean of the annual return for common stocks from 1926-2010 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 Table 6-6, find the two values that will bound the middle 50% of the annual returns?

---

Definitions:

Carter Doctrine

A foreign policy principle declared by President Jimmy Carter in 1980, stating that the U.S. would use military force if necessary to defend its national interests in the Persian Gulf.

Persian Gulf

A marginal sea of the Indian Ocean located between Iran and the Arabian Peninsula, known for its strategic economic importance due to vast oil reserves.

Military Force

An organization authorized to use lethal or deadly force and weapons to support the interests of the state and its citizens.

Disability Movement

A social movement aimed at securing equal rights, opportunities, and societal inclusion for individuals with disabilities.