Use Central Limit Theorem to solve this problem!

You want to invest in 8 different companies in the stock market. Your plan is to invest $12000 in every company. Each company's stocks may rise with probability "p" and you will gross $50000 (for a net profit of $50000 - $12000 = $38000), and with probability of "1-p", the company will not trade at a price you want it to sell, making you have a net profit of -$12000. The companies are all independent.

Your parents agreed to loan you the money as long as the net return from these investments is (+) with at least 99% certainty. Find the condition on "p" needed to be satisfied to get your parents to borrow you the money.

Answer rating: 100% (QA)

We can use the fact that the distribution is normal ... View the full answer