Refer to the Financial Management (Spring 1995)

study of 49 firms filing for prepackaged bankruptcy, Exercise 2.24

(p. 49). Recall that the variable of interest was length of time (months) in bankruptcy for each firm.

a. A MINITAB histogram for the 49 bankruptcy times is displayed on p. 77. Comment on whether the Empirical Rule is applicable for describing the bankruptcy time distribution for firms filing for prepackaged bankruptcy.

b. Numerical descriptive statistics for the data set are also shown in the MINITAB printout at the bottom of p. 77. Usc this information to construct an interval that captures at least 75% of the bankruptcy times foi "prepack" firms.

c. Refer to the data listed in Exercise 2.24. Count the number of the 49 bankruptcy times that fall within the interval, part

b, and convert the result to a percentage. Does the result agree with Chebyshev's Rule? The Empirical Rule?

d. A firm is considering filing a prepackaged bankruptcy plan. Estimate the length of time the firm will be in bankruptcy.