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A group of Internet stocks has a mean cost per share of M=$46 with standard deviation of s=$10. Aşsuming a normal distribution for the data, what interval will contain approximately $. 95% of the stock prices? to $

A group of Internet stocks has a mean cost per share of M=$46 with standard deviation of s=$10. Aşsuming a normal distribution for the data, what interval will contain approximately $. 95% of the stock prices? to $

MATLAB: An Introduction with Applications
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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**Understanding Normal Distribution and Stock Prices** A group of Internet stocks has a mean cost per share of M = $46, with a standard deviation of s = $10. Assuming a normal distribution for the data, what interval will contain approximately 95% of the stock prices? **Interval: $_____ to $_____** ### Explanation: In a normal distribution, approximately 95% of data falls within two standard deviations of the mean. Therefore, in this context: 1. Calculate the range: - Mean (M) = $46 - Standard Deviation (s) = $10 2. Apply the 95% rule: - Lower Bound: M - 2s = $46 - 2($10) = $26 - Upper Bound: M + 2s = $46 + 2($10) = $66 Thus, the interval is **$26 to $66.** This interval represents the range within which 95% of stock prices are expected to fall, assuming a normal distribution.
Transcribed Image Text:**Understanding Normal Distribution and Stock Prices** A group of Internet stocks has a mean cost per share of M = $46, with a standard deviation of s = $10. Assuming a normal distribution for the data, what interval will contain approximately 95% of the stock prices? **Interval: $_____ to $_____** ### Explanation: In a normal distribution, approximately 95% of data falls within two standard deviations of the mean. Therefore, in this context: 1. Calculate the range: - Mean (M) = $46 - Standard Deviation (s) = $10 2. Apply the 95% rule: - Lower Bound: M - 2s = $46 - 2($10) = $26 - Upper Bound: M + 2s = $46 + 2($10) = $66 Thus, the interval is **$26 to $66.** This interval represents the range within which 95% of stock prices are expected to fall, assuming a normal distribution.
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