The price-earnings ratio for firms in a given industry follows the normal distribution. In this industry, a firm whose price-ear

Question

3 years ago

5

nings ratio has a standardized value of z = 1.00 is approximately in the highest ______ percent of firms in the industry.
A. 16%
B. 34%
C. 68%
D. 75%

1 answer:

lesantik [10] · Answer 1 · 2022-02-06T17:15:51+03:00

Answer:

The correct answer is

A. 16%

Step-by-step explanation:

The zscore is used to solve problems of normally distributed samples.

This score indicates the percentage of a certain measure. It can be found looking at the z table.

For example, if a measure has a percentile of 75%, it is in the 100%-75% = highest 25 percent of all the measures.

$Z = 1$ has a pvalue 0.8413. So it is in the highest 1-0.8413 = 0.1587 = 16% percent of firms in the industry.

The correct answer is

A. 16%