A stock exchange has a mean stock price of $20 with standard deviation of $8.20.
Q. What is the probability a company will have a stock price of at least $40?
A. We want the right side of the distribution, because of the words at least.
So = 1 – norm.dist(40,20,8.20, true)= 0.007363
Q. How high does the stock price have to be to put the company in the top 10%?
A. The top 10% means on the right side of the distribution.
We need to find the value of the random variable that separates the top 10% from the bottom 90%.
We can use norm.inv for this. But—careful---if you put =norm.inv(0.1,20,8.2) you will get the random variable that separates the bottom 10 % from the top 90 %.
So =norm.inv(0.9,20,8.2) = 30.51 (rounded).
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