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The return expected from Project No. 542 is 22 percent. The standard deviation of these returns is 11 percent. If returns from the project are normally distributed, what is the chance that the project will result in a rate of return above 33 percent? What is the probability that the project will result in losses (negative rates of return)?
Submitted: 182 days and 17 hours ago.
Category: Math
Value: $15
Status: CLOSED
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Level: college; Subject: fiance
Accepted Answer
Dear jchris,
Great question! Here's how I'd answer it:
The return expected from Project No. 542 is 22 percent. The standard deviation of these returns is 11 percent. If returns from the project are normally distributed, what is the chance that the project will result in a rate of return above 33 percent?
z=(33-22)/11 = 1
P(z>1) = 0.159
What is the probability that the project will result in losses (negative rates of return)?
z=(0-22)/11 = -2
P(z<-2) = 0.023
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Let me know if you have questions about this. I'm happy to clarify any details!
Expert:
Greg
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Answered:
5/25/2009
Graduate Student
I teach math and statistics at a college level as a graduate teaching assistant
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