Posted by **Help** on Thursday, October 3, 2013 at 9:53pm.

An investment broker reports that the yearly returns on common stocks are approximately normally distributed with a mean return of 12.4 percent and a standard deviation of 20.6 percent. On the other hand, the firm reports that the yearly returns on tax-free municipal bonds are approximately normally distributed with a mean return of 5.2 percent and a standard deviation of 8.6 percent.

(a)

Use the investment broker’s report to estimate the maximum yearly return that might be obtained by investing in tax-free municipal bonds. (Round your answer to the nearest whole percent.)

Maximum yearly return 32%

(b)

Find the probability that the yearly return obtained by investing in common stocks will be higher than the maximum yearly return that might be obtained by investing in tax-free municipal bonds. (Round your answer to 4 decimal places.)

- stats -
**Anonymous**, Friday, December 20, 2013 at 1:04pm
0.1707

## Answer This Question

## Related Questions

- statistics - An investment broker reports that the yearly returns on common ...
- statistics - An investment broker reports that the yearly returns on common ...
- Statistics - An investment broker reports that yearly returns on common stocks ...
- Statistics - Suppose that the percentage returns for a given year for all stocks...
- statistics - Suppose that the percentage returns for a given year for all stocks...
- statistics - Suppose that the percentage returns for a given year for all stocks...
- Math - The yearly returns of a stock are normally distributed with a mean of 5.1...
- Statistics - The yearly returns of a stock are normally distributed with a mean...
- Business Statistics - 1. Suppose that the mean of the annual return for common ...
- FINANCE - Assume the returns from holding small-company stocks are normally ...

More Related Questions