For the 900 trading days from January 2003 through July 2006, the daily closing
ID: 3354628 • Letter: F
Question
For the 900 trading days from January 2003 through July 2006, the daily closing price of IBM stock (in $) is well modelled by a Normal model with mean $84.87 and standard deviation $4.68. Use the 68-95-99.7 Rule to approximate the following probabilities rather than using technology to find the values above precisely. Complete parts (a) through (d). The probability is 99.85%. (Type an integer or a decimal.) b) According to this model, what is the probability that on a randomly selected day in this period the stock price closed below $89.55? The probability is 84 %. (Type an integer or a decimal.) c) According to this model, what is the probability that on a randomly selected day in this period the stock price closed between $80.19 and $98.91? The probability is 1% (Type an integer or a decimal.)Explanation / Answer
c) probability that randomely selected price closed between 80.19 and 98.91
=P(80.19<X<98.91) =P(-1<Z<3) =99.85-16 =83.85 %