A simple business model is defined by the equation: Profit (P) = Revenues (R) - Expenses...

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A simple business model is defined by the equation: Profit (P) = Revenues (R) - Expenses (E) The variables R and E are normally distributed, such that R ~ N(15, 5) E~ N(10, 2) You want to know the probability that your profits exceed 8 million. You run a monte carlo simulation which shows profits exceeding 8 million appear only 4.1% of the time. Is this result consistent with the actual probability? A simple business model is defined by the equation: Profit (P) = Revenues (R) - Expenses (E) The variables R and E are normally distributed, such that R ~ N(15, 5) E~ N(10, 2) You want to know the probability that your profits exceed 8 million. You run a monte carlo simulation which shows profits exceeding 8 million appear only 4.1% of the time. Is this result consistent with the actual probability?

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To determine if the Monte Carlo simulation result is consistent with the actual probability we can c... View the full answer