According to a recent survey by Smith Travel Research, the average daily rate for a luxury hotel

Question:

According to a recent survey by Smith Travel Research, the average daily rate for a luxury hotel in the United States is $ 237.22. Assume the daily rate follows a normal probability distribution with a standard deviation of $ 21.45.

a. What is the probability that a randomly selected luxury hotel’s daily rate will be

1. Less than $ 250?

2. More than $ 260?

3. Between $ 210 and $ 240?

b. The managers of a local luxury hotel would like to set the hotel’s average daily rate at the 80th percentile, which is the rate below which 80% of hotels’ rates are set. What rate should they choose for their hotel?

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...