Historical Share Prices

Feb 4, 2012



historical share prices
Empirical rule i am getting desperate please help?

Suppose a companys stock has a mean price over its history of $37/share. Also suppose that this stock has a historical standard deviation of $15/share. Furthermore the stocks price distibution is symmetric in shape. Answer the following questions about the stocks price and disposition.

1)Use the empirical rule to explain why it would make sense to sell this stock if it is priced at $67/share or higher.

2)Use the empirical rule to estimate how often the price of the stock will fall below $22/share

Buy bonds.

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