Posted: September 8th, 2021

Activity 2 – advanced statistical concepts and business analytics

 Question:

For each investment class in Table 3, assume that future returns are normally distributed with the population mean and standard deviation as given. Based on this assumption:

1. For each investment class, find the probability of a return that is less than zero (that is, find the probability of a loss). Is your answer reasonable for all investment classes? Explain. 

2. For each investment class, find the probability of a return that is: 

      a. Greater than 5%.

      b. Greater than 10%. 

      c. Greater than 20%.

      d. Greater than 50%. 

3. For which investment classes is the probability of the return greater than 50% is essentially zero? For which investment classes is the probability of such a return greater than 1 percent? Greater than 5%?

4. For which investment classes is the probability of loss is essentially zero? 

5. For which investment classes is the probability of loss greater than 1%? Greater than 10%? Greater than 20%?

Table 3

Data on Rate of Return of Investment in Securities

Please provide your work in detail and include in-text citations.

Note:

1. Need to have at least 1 peer-reviewed article as the reference and textbook as the reference

2. Need in-text citation

3. Please find the attachments as the power points of the course for reference.

4. Textbook Information:

Bowerman, B., Drougas, A. M., Duckworth, A. G., Hummel, R. M. Moniger, K. B., & Schur, P. J.  (2019). Business statistics and analytics in practice (9th ed.). McGraw-Hill

ISBN 9781260187496

5. Please find the Course Learning Outcome list of this course in the attachment

6. Video link of how to use binom.dist: https://www.viddler.com/embed/ccbb35ca

7. Video link of how to apply norm.s.inv and norm.s.dist: https://www.viddler.com/embed/31008601

8. Video link of Fiding probability in a normal distribution with norm.dist

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