Based on the research of Ibbotson Associates, a Chicago investment firm, and Prof. Jeremy Siegel of the Wharton School of the University of Pennsylvania, the average return on large-company stocks since 1920 has been 10.5% per year and the standard deviation has been 4.75%.
Assuming a normal distribution for stock returns (and that the trend will continue this year), what is the probability that a largecompany stock you've just bought will make in 1 year at least 12%? Will lose money? Will make at least 5%?