A financial analyst computed the ROI for all companies listed on the NYSE. She found that the mean of this distribution was 10% with standard deviation of 5%. She is interested in examining further those companies whose ROI is between 14% and 16% of the approximately 1,500 companies listed on the exchange, how many are of interest of her?
First, use our z-score calculator to get P(0.14 < z < 0.16) = 0.007889
Divide that by 2 for two-tail test to get0.003944729
Use the NORMSINV(0.003944729) in Excel to get the Z value of 2.66
Therefore, the companies of interest are 2.66 * 1500 * 0.10 = 399
First, use our z-score calculator to get P(0.14 < z < 0.16) = 0.007889
Divide that by 2 for two-tail test to get0.003944729
Use the NORMSINV(0.003944729) in Excel to get the Z value of 2.66
Therefore, the companies of interest are 2.66 * 1500 * 0.10 = 399