Question

An initial public offering (IPO) is the first sale of stock by a private company to the public. In a study of more than 4000 IPOs, researchers found the average annual return over a five-year period for firms issuing an IPO was 5.1. If the distribution describing the returns reported for all the various IPO firms in the study is normal, with a standard deviation of 2.2%, what is the likelihood that a randomly selected IPO from the study had a 5-year average annual return that was
a. Negative?
b. Between 2.0% and 4.0%?
c. There is a .05 probability that the stock had a 5-year average annual return of at least______ %.
d. There is a .25 probability that the stock had a 5-year average annual return of less than______ %.


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  • CreatedJuly 16, 2015
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