Solution Found!
Individual Stock Price An individual stock is selected at
Chapter 3, Problem 76E(choose chapter or problem)
An individual stock is selected at random from the portfolio represented by the box-and-whisker plot shown. Find the probability that the stock price is (a) less than $21, (b) between $21 and $50, and (c) $30 or more.
Questions & Answers
QUESTION:
An individual stock is selected at random from the portfolio represented by the box-and-whisker plot shown. Find the probability that the stock price is (a) less than $21, (b) between $21 and $50, and (c) $30 or more.
ANSWER:
Step 1 of 3
Given the portfolio represented by the box-and-whisker plot is given below,
Our goal is:
a). We need to find the probability that the stock price is less than 21.
b). We need to find the probability that the stock price is between 21 and 50.
c). We need to find the probability that the stock price is 30 or more.
a). From the above plot, the following information is
The minimum value is 12 and the \(25^{\text {th }}\) percentile is 21.
The median (50th percentile) is 30
Then the maximum value is 94 and the 75th percentile is 50.
From the given information we know that to understand the data, this means 25% of the data is between the minimum and the \(25^{\text {th }}\) percentile.
Then 25% of the data is between the \(25^{\text {th }}\) percentile and median.
Now we have to find the probability less than 21.
So It's no coincidence that this is the \(25^{\text {th }}\) percentile.
Here 25% of the data is below 21 so the probability is 25%.
Therefore, the probability that the stock price is less than 21 is 25 percent.