Question

Assume that JQH’s returns are normally distributed. The expected return for JQH is 10% and standard deviation is 5%. What is the probability of JQH stock providing a return within the range 15% to 20%?Assume that JQH’s returns are normally distributed. The expected return for JQH is 10% and standard deviation is 5%. What is the probability of JQH stock providing a return within the range 15% to 20%?2.5%16%68%13.5%none

Answer 1

13.5%

Step-by-step explanation:

From this question we have the following information

We have mean return = 10

Standard deviation = 5

We use this formula

Z = x - mean/standard deviation

X is between 15 and 20

15< X< 20

= 15-10/5 < Z < 20-10/5

= 1 < z < 2

Using the Statistical table,

P(z < 2) = 0.9772

P(z< 1) = 0.8413

0.9772 - 0.8413 = 0.1359 x 100

= 13.5%

The probability of JQH stock providing a return within the range 15% to 20% = 13.5%

Thank you