Suppose that the average stock price for companies making up the S&P 500 is $30. The standard deviation is $8.20. Assume that the stock prices are normally distributed. What is the probability that a S&P 500 company’s stock price is at least $40? (b) How high would a company’s stock price have to be to put it in the top 10% of S&P 500?

We have given that X~N( μ , ?^2 ) μ = 30 , ? = 8.20 Z-score =( x - μ )/?

Answered: Suppose that the average stock price…

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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Suppose that the average stock price for companies making up the S&P 500 is $30. The standard deviation is $8.20. Assume that the stock prices are normally distributed.

What is the probability that a S&P 500 company’s stock price is at least $40?

(b) How high would a company’s stock price have to be to put it in the top 10% of S&P 500?

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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