Question

The daily stock price for International Business Machines (IBM) historically has followed an approximately normal distribution (when adjusting for inflation) with a mean of $143.311 and standard deviation of $3.9988 Approximately 38.34% of days IBM had a stock price greater than what dollar amount?

Question 5 options:

1)

144.5

2)

138.57

3)

148.05

4)	We do not have enough information to calculate the value.

5)

142.13

Answer 1

Solution:-

Given that,

mean = = 143.311

standard deviation = = 3.9988

Using standard normal table,

P(Z > z) = 38.34%

= 1 - P(Z < z) = 0.3834

= P(Z < z) = 1 - 0.3834

= P(Z < z ) = 0.6166

= P(Z < 0.30 ) = 0.6166  

z = 0.30

Using z-score formula,

x = z * +

x = 0.30 * 3.9988 + 143.311

x = 144.5

correct option is = 1)