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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
4–35. Based on the research of Ibbotson Associates, a Chicago investment firm, and Prof. Jeremy Siegel of the Wharton School of the University of Pennsylvania, the
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1This information is inferred from data on foreign exchange rates in The New York Times, April 20, 2007, p. C10.
2“The Ratings,” Wine Spectator, May 15, 2007, p. 156.
3Mitchell Martin, “Stock Focus: Ride the Rocket,” Forbes, April 26, 2004, p. 138.
162 Chapter 4
average return on large-company stocks since 1920 has been 10.5% per year and the standard deviation has been 4.75%. Assuming a normal distribution for stock returns (and that the trend will continue this year), what is the probability that a large- company stock you’ve just bought will make in 1 year at least 12%? Will lose money? Will make at least 5%?
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