inancial analysts who make forecasts of stock prices are categorized as either "buy-side" analysts or "sell-side" analysts. The mean and standard deviation of the forecast errors for both types of analysts are shown in the table to the right. Assume that the distribution of forecast errors are approximately normally distributed. Buy-Side Analysts Sell-Side Analysts Mean 0.86 −0.05 Standard Deviation 1.93 0.81 a. Find the probability that a buy-side analyst has a forecast error of +2.02 or higher. b. Find the probability that a sell-side analyst has a forecast error of +2.02 or higher

inancial analysts who make forecasts of stock prices are categorized as either "buy-side" analysts or "sell-side" analysts. The mean and standard deviation of the forecast errors for both types of analysts are shown in the table to the right. Assume that the distribution of forecast errors are approximately normally distributed. Buy-Side Analysts Sell-Side Analysts Mean 0.86 −0.05 Standard Deviation 1.93 0.81 a. Find the probability that a buy-side analyst has a forecast error of +2.02 or higher. b. Find the probability that a sell-side analyst has a forecast error of +2.02 or higher

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018

18th Edition

ISBN:9780079039897

Author:Carter

Publisher:Carter

Chapter10: Statistics

Section10.4: Distributions Of Data

Problem 19PFA

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Question

Financial analysts who make forecasts of stock prices are categorized as either "buy-side" analysts or "sell-side" analysts. The mean and standard deviation of the forecast errors for both types of analysts are shown in the table to the right. Assume that the distribution of forecast errors are approximately normally distributed.


	Buy-Side Analysts	Sell-Side Analysts
Mean	0.86	−0.05
Standard Deviation	1.93	0.81

a. Find the probability that a buy-side analyst has a forecast error of

+2.02

or higher.

b. Find the probability that a sell-side analyst has a forecast error of

+2.02

or higher

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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