14 Question 3 continued Chidi looks at the daily price of BASF shares over several years in the past and decides that he will keep his shares. He wants to apply a statistical model to his complete 2018 dataset of the daily percentage change of the BASF share price so that he can make comparisons between 2018 and other years. He uses statistical software to plot a histogram of the daily percentage change of the BASF share price for 2018 and marks the mean value with a vertical line, Figure 5. 80 60 40 20 0 Daily percentage change of BASF share price in 2018 –7.5 –5.0 –2.5 0.0 2.5 5.0 Frequency (Data source: https://www.basf.com) Figure 5 As well as calculating the mean of –0.163% and the standard deviation of 1.37%, Chidi finds that: 183 of the 251 values in his dataset are within 1 standard deviation of the mean 241 of the 251 values in his dataset are within 2 standard deviations of the mean (c) Comment on the validity of using the model N(–0.163, 1.372) for the daily percentage change of the BASF share price in 2018. Use Chidi’s calculations above and Figure 5 to support your comments. (4) _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________