E ach year Money magazine consultants compile a list of 50 blue-chip stocks. The
ID: 2959950 • Letter: E
Question
Each year Money magazine consultants compile a list of 50 blue-chip stocks.
These stocks are analyzed and suggestions are made about which ones to buy, which should be held,
and which should be sold. Let us assume that in one issue the consultants recommended
17 “buys” and published this buy list with the quoted prices of each stock..round each answer 3 decimal places
Stock price stock price
Syntex 23.00 H.J.Heinz 40.75
Marion Merrell Dow 49.95 Rite Aid 56.00
Eli Lilly 47.46 GM E shares 44.75
Merck 39.26 Schering-Plouge 53.25
Warner Lambert 42.63 British Telecom 29.75
Borden 57.44 Stanhome 49.00
McGraw-Hill 31.25 Glaxo Holdings 33.00
Abbott Labs 43.32 Hubbell B Shares 65.00
Bristol-Meyers 37.35
6.What is the probability that if one stock was chosen at random, that it would cost more than $55
7.What is the probability that if one stock was chosen at random that it would cost less than $50?
Explanation / Answer
Given mean= 43.715, s= 10.98, n=17 --------------------------------------------------------------------------------------------------------------- 6.What is the probability that if one stock was chosen at random, that it would cost more than $55 P(X>55) = ((X-mean)/s > (55-43.715)/10.98) =P(t(with df=n-1=16) > 1.03) = 0.1591 (check student t table) --------------------------------------------------------------------------------------------------------------- 7.What is the probability that if one stock was chosen at random that it would cost less than $50? P(XRelated Questions
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