Question

Trading volume on the New York Stock Exchange is heaviest during the first half hour (early morning) and last half hour (late afternoon) of the trading day. The early morning trading volumes (millions of shares) for 19 days in January and February are shown here (Barron's, January 23, 2006; February 13, 2006; and February 27, 2006).

Trading Volume (millions of shares)

220

198

188

176

182

201

262

168

270

201

216

207

199

190

211

179

197

213

187

The probability distribution of trading volume is approximately normal.

a. Compute the mean and standard deviation to use as estimates of the population mean and standard deviation.

b. What is the probability that, on a randomly selected day, the early morning trading volume will be less than 195 million shares?

c. What is the probability that, on a randomly selected day, the early morning trading volume will exceed 230 million shares?

d. How many shares would have to be traded for the early morning trading volume on a particular day to be among the busiest 5% of days?

Answer 1