Question

The major stock market indexes had strong results in 2013. The mean one- year return for stocks in the S& P 500, a group of 500 very large companies, was $ 29.6%. The mean one- year return for the NASDAQ, a group of 3,200 small and medium- sized companies, was $ 38.3%. Historically, the one- year returns are approximately normally distributed, the standard deviation in the S& P 500 is approximately 20%, and the standard deviation in the NAS-DAQ is approximately 30%.
a. What is the probability that a stock in the S& P 500 gained value in 2013?
b. What is the probability that a stock in the S& P 500 gained 10% or more in 2013?
c. What is the probability that a stock in the S& P 500 lost 20% or more in 2013?
d. What is the probability that a stock in the S& P 500 lost 30% or more in 2013?
e. Repeat (a) through (d) for a stock in the NASDAQ.


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  • CreatedJuly 16, 2015
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