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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 taxfree 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 taxfree 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 taxfree municipal bonds. (Round your answer to 4 decimal places.)

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