Question

You want to invest in companies belonging to Gispa Group of

1
Companies, Inc. so you did some research and found out that companies belonging to this group has an average gain of
0.8
percent and standard deviation of
0.7
percent. Given that a positive percent (gain) means profit and a negative percent means a loss. If you choose
20
companies, what is the probability that the companies are gaining more than
1
percent?

Answer 1

1.2803

Explanation:

According to the Question,

• Given That, You want to invest in companies belonging to Gispa Group of 1 Companies, Inc. so you did some research and found out that companies belonging to this group have an average gain of 0.8 percent and a standard deviation of 0.7 percent.

• And, a positive percent (gain) means profit and a negative percent means a loss. If you choose 20 companies.

Therefore, We have Average Gain(ц) = 0.8%

Standard deviation(σ) = 0.7%

Number of Companies(n) = 20

• So, the probability that the companies are gaining more than 1 percent is

`X_(i)` = (σ² × n) / ц ⇒ (0.7²×20) / (0.8*10) = 1.2803