Question: Astandardizedvariable Y dealing withafinancialoutcomeisconsideredtotakeanunusually extreme valueif y > 3. Find P(Y > 3) if (a) Y is modeledashavingastandardnormaldistri- bution Y N(0, 1), (b) Y

Astandardizedvariable Y dealing withafinancialoutcomeisconsideredtotakeanunusually extreme valueif y > 3. Find P(Y > 3) if

(a) Y is modeledashavingastandardnormaldistri-

bution Y ∼ N(0, 1),

(b) Y instead behaveslikearatioofstandardnormalrandomvariables, in whichcase Y has thestandardCauchydistribution(4.11).Whatdoyouobserve?

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