The Rate of Return for firms on the stock market is about 8% on average(the mean)...

The Rate of Return for firms on the stock market is about 8% on average(the mean) with a standard deviation of 6%.

(A) What proportion of firms will earn a return between 5% and 10%?

(B) To the nearest percent, find the probability of a firm earning 0% or less per year (i.e. not making money or losing money)? If there are 1,000 firms listed on the stock market, then how many firms will not make any money or lose money?

(C) To the nearest percent, find the probability of a firm earning 14% return in a year. If there are still 1,000 firms listed on the stock market, then how many firms will earn a return of 14% or higher?

(D) What rate of return would put a firm in the top 15%?

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Expert Solution

milcah answered 8 months ago

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