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

When returns from a project can be assumed to be normally distributed, such as those shown in Figure 13-6 (represented by a symmetrical, bellshaped 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 (D1). Similarly, 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 $26,000 and a standard a. What is the probability that the outcome will be between $23,400 and $28,600? Note: Do not round intermediate calculations. Round your answer to 4 decimal places. b. What is the probability that the outcome will be between $18,200 and $33,800 ? Note: Do not round intermediate calculations. Round your answer c. What is the probability that the outcome will be at least $20,000 ? 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 $41,410 ? 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 $20,800 or greater than $28,600 ? Note: Do not round intermediate calculations. Round your answer to 4 decimal places. When returns from a project can be assumed to be normally distributed, such as those shown in Figure 13-6 (represented by a symmetrical, bellshaped 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 (D1). Similarly, 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 $26,000 and a standard a. What is the probability that the outcome will be between $23,400 and $28,600? Note: Do not round intermediate calculations. Round your answer to 4 decimal places. b. What is the probability that the outcome will be between $18,200 and $33,800 ? Note: Do not round intermediate calculations. Round your answer c. What is the probability that the outcome will be at least $20,000 ? 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 $41,410 ? 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 $20,800 or greater than $28,600 ? Note: Do not round intermediate calculations. Round your answer to 4 decimal places
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
