# stocks and rate of return

FratBro23
Category:
Statistics
Price: \$20 USD

Question description

Consider two stocks, A and B, that have investment rates of return that are Normally

distributed as follows:

Stock A:  kA  =  investment rate of return -  kA  ~  N [  μA = 16  %,  σA =  3 % ]

Stock B:  kB  =  investment rate of return -  kB  ~  N [  μB =  13  %,   σB =  6 % ]

For which stock is a rate of return of k2011 = 25%  during the current year more unusual?

Utilize the Z score value to evaluate this.  Which stock is then more likely to return 25% ?

(Top Tutor) Daniel C.
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