The stock returns of 500 stocks are normally distributed wit

The stock returns of 500 stocks are normally distributed with a mean of 10.5% and a standard deviation of 4%. What is the probability that a stock chosen at random has a return less than 15%? (please round your answer to 4 decimal places)

Solution

So the probability that a stock chosen at random has a return less than 15% is

P(X<15) = P((X-mean)/s <(15-10.5)/4)

=P(Z<1.13) =0.8708 (from standard normal table)