# Question

The daily exchange rate of one dollar in euros during the first three months of 2007 can be inferred to have the following distribution.

X P(x)

0.73 ... 0.05

0.74 ... 0.10

0.75 ... 0.25

0.76 ... 0.40

0.77 ... 0.15

0.78 ... 0.05

a. Show that P(x) is a probability distribution.

b. What is the probability that the exchange rate on a given day during this period will be at least 0.75?

c. What is the probability that the exchange rate on a given day during this period will be less than 0.77?

d. If daily exchange rates are independent of one another, what is the probability that for two days in a row the exchange rate will be above 0.75?

X P(x)

0.73 ... 0.05

0.74 ... 0.10

0.75 ... 0.25

0.76 ... 0.40

0.77 ... 0.15

0.78 ... 0.05

a. Show that P(x) is a probability distribution.

b. What is the probability that the exchange rate on a given day during this period will be at least 0.75?

c. What is the probability that the exchange rate on a given day during this period will be less than 0.77?

d. If daily exchange rates are independent of one another, what is the probability that for two days in a row the exchange rate will be above 0.75?

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