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Math Help - statistics: probability question

  1. #1
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    statistics: probability question

    A company is interested in investing in companies in Hong Kong. They have access to a large data set on the rate of return on assets (expressed as a percentage) for a large number of companies operating in Hong Kong and have noticed that the data are normally distributed with mean = 9 and Standard deviation = 21

    Explain how the company could use the information above to assess the probability of a company having a rate of return above or below a given figure.
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  2. #2
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    Quote Originally Posted by dan0408 View Post
    A company is interested in investing in companies in Hong Kong. They have access to a large data set on the rate of return on assets (expressed as a percentage) for a large number of companies operating in Hong Kong and have noticed that the data are normally distributed with mean = 9 and Standard deviation = 21

    Explain how the company could use the information above to assess the probability of a company having a rate of return above or below a given figure.
    \cdots -3\sigma-\mu=-54, \ -2\sigma-\mu=-33, \ -\sigma-\mu=-12, \ \mu=9, \ \sigma+\mu=30, \ 2\sigma+\mu=51, \ 3\sigma+\mu=72\cdots

    Since it is normal distributed, what percent falls between \pm\sigma, \ \pm 2\sigma, \ \pm 3\sigma\text{?}
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  3. #3
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    Do you know the (68-95-99.7)% rule?
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  4. #4
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    nope i do not know that rule
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  5. #5
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    Its the answer to the question in post #2. Can you link the ideas?
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  6. #6
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    More generally, if the desired rate of return is x, calculate the "standard variable" z= \frac{x- 9}{21} and look up the probability in a table of the standard normal distribution. A good one is at Standard Normal Table.
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