The number of shares traded daily is referred to as the volume of trade. During 2008 the average volume traded daily on the ASX All Ordinaries was 992 million with a standard deviation of 252 million.

Assume that the number of shares traded on the ASX is a normal random variable with a mean of 992 million and a standard deviation of 252 million. For a randomly selected day, what is the probability that the volume of trading in these shares is:

(a) below 500 million?

(b) between 750 and 1,000 million?

(c) above 1,200 million?

(d) On 18 September 2008 the All Ordinaries volume of trade was 2,125 million. What is the probability that the volume of trading for the All Ordinaries on a randomly selected day was at least 2,125 million? What conclusions can you draw from this probability?

(In answering this question you need to show all calculations and demonstrate how you obtain your results).

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Answer: (a) The probability that volume of share trading is less than 500 million is 0.025 . (b) The... View the full answer

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Let X denote the number of shared traded, then X follows normal distribution with mean mu=992 and standard deviation... View the full answer

(a) T he probability that the volume of trading in these shares below 500 million = 0.026. (b) The probability that the... View the full answer