Score: 0 of 1 pt 501814 complete) Hw Score: 38.37%, 3.07 of 8 pts 7.1.28 For 300

Question

Score: 0 of 1 pt 501814 complete) Hw Score: 38.37%, 3.07 of 8 pts 7.1.28 For 300 trading days, the daily cosing price of a stock (n $) is well modeled by a Normal model with mean $196.04 and standard deviation $7.16. Acconding to this model, what is the probability that on a randomly selected day in this period the stock price closed as follows a) above $203 20? b) below $210.367 c) between $181.72 and $210.36? d)which would be more uusuaL a day on which te stock price dosed above S206 or below $190? Round to one decimal place as needed.)

Explanation / Answer

Solution:-GIven that mean = $196.04, sd = $7.16
Formula: z = (X - Mean)/SD
a) P(X > $203.20) = P(Z > (203.20 - 196.04)/7.16)
= P(Z > 1)
= 0.1587

b) P(X < $210.36) = P(Z < (210.36 - 196.04)/7.16)
= P(Z < 2)
= 0.9772

c) P($181.72 < X < 210.36) = P(-2 < Z < 2)
= 0.9544

d) Since the probability when X > 206 is smaller than the probability when X < 190, it can be said that the stock price would be more unusual when it is above 206

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