Hi ,all R26 EOC P.332 q12 Please instruct me how to read the EXHIBIT8 ? 90percent line indicates wealth level which will be realized 90percent probability? what does “wealth percentiles” mean? Thanks in advance.
wealth percentile means percentage of wealthy people below that line. so 90 percentile mean 90% lie below that. Since we need a 90 percentile probability - look at the 10% line. value in 2012 does it meet the 630K criterion or not? (and it has to be an approximation only) given the axis on the left showing wealth is a lognormal line. (100K, 1000K and 10000K are equidistant from each other).
Thanks CP !!