Let x be a random variable representing the dividend yield of some stocks. Assume x has a normal distribution with o = 2.4%. A random sample of 10 stocks had an average of 5.38%. For the entire stock market the mean dividend yield i u = 4.7%. Does this data indicate that the %3D dividend yield of all stocks is higher than 4.7%? Use alpha = .01 %3D
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
![2. Let x be a random variable representing the dividend yield of some stocks. Assume x has a
normal distribution with o = 2.4%. A random sample of 10 stocks had an average of 5.38%.
For the entire stock market the mean dividend yield i u = 4.7%. Does this data indicate that the
dividend yield of all stocks is higher than 4.7%? Use alpha = .01](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3710bc03-5263-4862-89e7-24bd7413d4f2%2F86a7bc81-e15c-4730-9c85-eedb63fb0628%2Fzku1zm_processed.png&w=3840&q=75)
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