what is the probability that a large company stock you’ve just bought will make in 1 year at least 12%? Will lose money? Will make at least 5%?
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
Based on the research of Ibbotson Associates, a Chicago investment firm, and Prof. Jeremy Siegel of the Wharton School of the University of Pennsylvania, the average return on large-company stocks since 1920 has been 10.5% per year and the standard deviation has been 4.75%. Assuming a
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