Chapter 7, Problem 31PS

The article mentioned in Problem 7.30 reported that the stock market in Germany had a mean return of $6.9\%$ in 2016. Assume that returns for stocks on the German stock market were distributed normally, with a mean of 6.9 and a standard deviation of 10. If you select an individual stock from this population, what is the probability that it would have a return

a. less than 0(i.e., a loss)?

b. between –10 and –20?

c. greater than –5?

If you selected a random sample of four stocks from this population, what is the probability that the sample would have a mean return

d. less than 0 (a loss)?

e. between –10 and –20?

f. greater than –5?

g. Compare your results in parts (d) through (f) to those in (a) through (c).