Given a normal distribution,assume you want to earn a rate of return that plots more than three standard deviations above the mean.What is your probability of earning such a return in any one year?
A).14 percent or less
B).15 to .25 percent
C).26 to .50 percent
D).51 to 1 percent
E)More than 1 percent

Question

Quizplus · Accepted Answer

Assuming a normal distribution, approximately 99.7% of the data falls within three standard deviations of the mean. Therefore, the probability of earning a rate of return that plots more than three standard deviations above the mean is only 0.3% (100% - 99.7% = 0.3%). Choice A is the only option that represents a probability of 0.14% or less, making it the best choice.

Given a Normal Distribution,assume You Want to Earn a Rate