A Stockbroker Has Kept a Daily Record of the Value

question 71

Multiple Choice

A stockbroker has kept a daily record of the value of a particular stock over the years and finds that prices of the stock form a normal distribution with a mean of $8.52 with a standard deviation of $2.38. The percentile rank of a price of $13.87 is _________.

• A) 48.78%
• B) 1.22%
• C) 98.78%
• D) 51.22%

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Definitions:

Inferior Good

A type of good for which demand decreases as the income of individuals increases, inverse to typical goods.

Price Range

The spread between the highest and lowest price of a commodity, security, or asset over a given period.

Demand

The desire and ability of consumers to purchase goods and services at given prices.

Perfectly Elastic

Describes a situation in economics where the demand or supply for a product can vary infinitely with a small change in price.