value tells us about how the observed value of x compares to the mean 5.29 Weekly demand at a grocery store for a brand of breakfast cereal is normally distributed with a mean of 800 boxes and a standard deviation of 75 boxes‚ a. What is the .probability that weekly demand is (1) 959 boxes or less? (2) More than 1‚004 boxes? (3) Less than 650 boxes or greater than 950 boxes? b. The store orders cereal from a distributor weekly. How many boxes should the store order for a week to have only a 2
Premium Normal distribution Median Probability theory
4‚ & 6) 1. Is the return on the one-year T-bill risk free? No‚ the return on the one-year T-bill is not risk free. Financial risk is related to the probability of earning a return less than expected and the larger the chance of earning a return far below that expected‚ the greater the amount of financial risk. Risk free assumes 100% probability that the investment will earn the total percent of return that is expected. 2. Calculate the expected rate of return on each of the five investment alternatives
Premium Standard deviation Investment Probability theory
expected returns for securities Determine the deviation of possible returns from the expected return for each security. Determine the sum of the product of each deviation of returns of two securities and probability. Let us consider the data of two securities X and Y. State of economy Probability X Returns Y A 0.1 -8 14 COMPANY B ri Pi Piri ri Pi Piri B 0.2 10 -4 6 0.10 0.6 4 0.1 0.4 C 0.4 8 6 7 0.25 1.75
Premium Variance Risk Arithmetic mean
MA241 Lab 1 - Experimental Design; Probability Name: Student Number: Lab Fall 2014 1. [2 marks] MA241 has a population of 120 students. The students are listed in alphabetical order‚ and then divided‚ in order‚ into groups of three. The names of each group of three students are written on 40 slips of paper. Then‚ one slip of paper is chosen in order to get a sample of size n = 3. Does this represent a simple random sample? Explain why or why not in your own words. No‚ this does not represent
Premium Sampling Probability theory Regression analysis
large sample size is more than thirty. Here are the steps to finding the probabilities associated with a sampling distribution of x bar. First you need to find the sample mean by dividing the sum of the samples by the number of samples. Next you will need to define the sampling distribution. If you have a sample size that is sufficiently large‚ this will be approximately normal. The third step is to define the probability statement of interest. The last step is to use
Premium Standard deviation Normal distribution Sample size
2013 This note relates to the derivation of the “quick and dirty” formula for estimating the bias generated by using the YTM as an approximation of the expected return on debt. The assumptions: 1. Debt is perpetual 2. probability of default is δ in each period. The probability is the same in every period 3. If default occurs‚ bondholders receive ρ fraction of the face (principal) value of the bond plus accrued interest. 4. Bond is sold at par‚ i.e.‚ the bonds initial price equals its principal
Premium Probability theory Loan Money
INVESTMENT & PORTFOLIO MANAGEMENT FIN3IPM TUTORIAL ANSWERS TUTORIAL 1: INTRODUCTION CHAPTER 1: QUESTION 1 a The process of investment concerns the purchase of assets which will provide a future return to allow for future consumption or further investment. Individuals have to make choices between current and future consumption and because their pattern of income does not always match their pattern of consumption‚ they are required to make investments. Throughout an individual’s life
Premium Investment Risk aversion Variance
exponential distribution with a mean of 4 minutes‚ find the probability that it will take a randomly selected student more than 10 minutes to park in the library lot. | 0.917915 | | 0.670320 | | 0.329680 | | 0.082085 | 6 out of 6 Correct!! Question 2 of 25 On the average‚ 1.8 customers per minute arrive at any one of the checkout counters of a grocery store. What type of probability distribution can be used to find out the probability that there will be no customer arriving at a checkout
Premium Random variable Probability theory Standard deviation
Fill target 8.44 oz. Five Samples taken from every batch of 1‚000. (Please find conversion table of the sampling and averages on Appendix 1) Advantages: Based on the current fill target more than 95.45% of packages are with weight above 8oz and probability of package to be underweight is less than 0.0063 % (more than 4 STD from the mean) z=(8-8.49)/STD/SQRT/(5) Potential fine for underweight package is practically nonexistent. (We apply the Central Limit Theorem) Disadvantages: Based on the higher
Premium Arithmetic mean Probability theory
changes in operation of cash flow and expected value of the firm. Growth rate WACC FCFF Value of firm Probability Weighted value of firm 3% 14.35% 100% $76‚481.712 30% $22‚944.52 3% 14.35% 50% $32‚882.04 30% $9‚864.61 3% 14.35% 0% $0 40% 0 Total Value $32‚809.132 At growth rate of 3%‚ the expected value of Digital Everywhere is $32‚809.132 Growth rate WACC FCFF Value of firm Probability Weighted value of firm 2% 13% 100% $71‚682.61 30% $21‚504.783 2% 13% 50% $35‚841.30 30% $10‚752.39
Premium Probability theory Generally Accepted Accounting Principles Economics