Suppose that it is believed that investor returns on equity investments at a particular brokerage house are normally distributed with a mean of 9 percent and a standard deviation equal to 3.2 percent.What percent of investors at this brokerage hour earned at least 5 percent?
A)89.44 percent
B)10.56 percent
C)39.44 percent
D)100 percent

Question

Quizplus · Accepted Answer

To find the percentage of investors who earned at least 5 percent, we calculate the Z-score for 5 percent using the formula Z = (X - μ) / σ, where X is 5, μ is 9, and σ is 3.2. The Z-score is -1.25. Using the standard normal distribution table, the cumulative probability for Z = -1.25 is approximately 0.1056. Therefore, the percentage of investors earning at least 5 percent is 1 - 0.1056 = 0.8944 or 89.44 percent.

Suppose That It Is Believed That Investor Returns on Equity