# Thread: statistics: probability question

1. ## 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.

2. Originally Posted by dan0408
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.
$\displaystyle \cdots -3\sigma-\mu=-54, \ -2\sigma-\mu=-33, \ -\sigma-\mu=-12, \ \mu=9, \ \sigma+\mu=30, \ 2\sigma+\mu=51, \ 3\sigma+\mu=72\cdots$

Since it is normal distributed, what percent falls between $\displaystyle \pm\sigma, \ \pm 2\sigma, \ \pm 3\sigma\text{?}$

3. Do you know the (68-95-99.7)% rule?

4. nope i do not know that rule

5. Its the answer to the question in post #2. Can you link the ideas?

6. More generally, if the desired rate of return is x, calculate the "standard variable" $\displaystyle z= \frac{x- 9}{21}$ and look up the probability in a table of the standard normal distribution. A good one is at Standard Normal Table.