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| Math Central | Quandaries & Queries |
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Question from Kenneth: Hello: I need some clarification regarding the word "percentile." Here is an example and what I know: If an investor had twenty stocks in his portfolio and five of those stocks paid an annual dividend of $200.00 or more, the five stocks are in the 25 percentile. Why is this word necessary? If my example and explanation is correct, why not simply indicate that 25% of his stocks paid an annual dividend of $200.00 or more? I thank you for your reply. |
Hi Kenneth,
You are correct, in this situation you don't need the term percentile. Percentiles are commonly used in situations where the rank is important rather than the numerical value. For example in standardized tests that children take in school, if a child scores at the 25th percentile then the child has done better that 75% of the children who wrote the test.
I hope this helps,
Penny
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