Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

When returns from a project can be assumed to be normally distributed, such as those shown in Figure 13-6 (represented by a symmetrical, bell-shaped curve),

image text in transcribed
image text in transcribed
When returns from a project can be assumed to be normally distributed, such as those shown in Figure 13-6 (represented by a symmetrical, bell-shaped curve), the areas under the curve can be determined from statistical tables based on standard deviations. For example, 68.26 percent of the distribution will fall within one standard deviation of the expected value ( D=10 ) Simitarly, 95.44 percent will fall within two standard deviations (D20), and so on. An abbreviated table of areas under the normal curve is shown. next- Assume Project A has an expected value of $22,000 and o standard deviation (0) of $4,400. a. What is the probability that the outcome will be between $19,800 and $24.200 ? Note: Do not round intermediate calculations. Round your answer to 4 decimal places. b. What is the probability that the outcome will be between $13.200 and 530.800 ? Note: Do not round intermediote calculationsi Round yout enswer to 4 decimal places. c. What is the probability that the outcome will be at least $15,000 ? Note: Do not round intermediate calculations. Round your answer to 4 decimal places. d. What is the probability that the outcome will be less than $30.800 ? Note: Do not round intermediate calculations. Round your answer to 4 decimal places. e. What is the probability that the outcome will be less than $17,600 or greater than $26,400 ? Note: Do not round intermediate calculetions. Round your answer to 4 decimal places

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Computational Finance And Its Applications

Authors: C. A. Brebbia, M. Costantino

1st Edition

1853127094, 978-1853127090

More Books

Students also viewed these Finance questions