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All the major stock market indexes posted strong gains in 2009. The mean one-year return for stocks in the S&P 500, a group of 500 very large companies, was 23.45%. The mean one-year return for the NASDAQ, a group of 3,200 small and medium-sized companies, was 43.89%. Historically, the oneyear returns are approximately normally distributed, the standard deviation in the S&P 500 is approximately 20%, and the standard deviation in the NASDAQ is approximately 30%. a. What is the probability that a stock in the S&P 500 gained value in 2009? b. What is the probability that a stock in the S&P 500 gained 10% or more? c. What is the probability that a stock in the S&P 500 lost 20% or more in 2009? d. What is the probability that a stock in the S&P 500 lost 40% or more? e. Repeat (a) through (d) for a stock in the NASDAQ. f. Write a short summary on your findings. Be sure to include a discussion of the risks associated with a large standard deviation
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