Question

An investment broker reports that the yearly returns on common stocks are approximately normally distributed with a mean return of 12.4 percent and a standard deviation of 20.6 percent. On the other hand, the firm reports that the yearly returns on tax- free municipal bonds are approximately normally distributed with a mean return of 5.2 percent and a standard deviation of 8.6 percent. Find the probability that a randomly selected
a. Common stock will give a positive yearly return.
b. Tax- free municipal bond will give a positive yearly return.
c. Common stock will give more than a 10 percent return.
d. Tax-free municipal bond will give more than a 10 percent return.
e. Common stock will give a loss of at least 10 percent.
f. Tax-free municipal bond will give a loss of at least 10 percent.


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  • CreatedMay 28, 2015
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