I believe the solutions on the website is wrong as the equation I attached on the 2nd image does not appear anywhere in my textbook. It does, however, have the same equation but it only divides σ it does not divide σ/√N. Can you please help me with the answer to this question. 4stepReturns on stocks. Andrew plans to retire in 40 years. He plans to investpart of his retirement funds in stocks, so he seeks out information on pastreturns. He learns that from 1966 to 2015, the annual returns on the S&P 500had mean 11.0% and standard deviation 17.0%.8 The distribution of annualreturns on common stocks is roughly symmetric, so the mean return over even a681moderate number of years is close to Normal. What is the probability (assumingthat the past pattern of variation continues) that the mean annual return oncommon stocks over the next 40 years will exceed 10%? What is the probabilitythat the mean return will be less than 5%? Follow the four-step process asillustrated in Example 15.8.

It is given that he mean is 11.0% and standard deviation is 17.0%.

Answered: 4step Returns on stocks. Andrew plans…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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I believe the solutions on the website is wrong as the equation I attached on the 2nd image does not appear anywhere in my textbook. It does, however, have the same equation but it only divides σ it does not divide σ/√N. Can you please help me with the answer to this question.

4step
Returns on stocks. Andrew plans to retire in 40 years. He plans to invest
part of his retirement funds in stocks, so he seeks out information on past
returns. He learns that from 1966 to 2015, the annual returns on the S&P 500
had mean 11.0% and standard deviation 17.0%.8 The distribution of annual
returns on common stocks is roughly symmetric, so the mean return over even a
681
moderate number of years is close to Normal. What is the probability (assuming
that the past pattern of variation continues) that the mean annual return on
common stocks over the next 40 years will exceed 10%? What is the probability
that the mean return will be less than 5%? Follow the four-step process as
illustrated in Example 15.8.

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