| How about this?

How about this?

SHARRI M asked:


5.A venture capital company feels that the rate of return (X) on a proposed investment is normally distributed with a mean of 30% and a standard deviation of 10%. Find the probability that the return will exceed 55%.

a)Define the random variable for this problem
b)Write the probability statement for this problem
c) Solve the problem

Related posts:

  1. Venture Capital - Best time during start-up to seek VC and timetable for getting Money? ScottyMac asked: I’ve been working on a web start-up for...
  2. I am seeking out Investors/Venture Capital people who are interested to Invest in new Business Projects? Richard O asked: I am starting a new Promotional Entertainment...
  3. Organization type for venture capital? Albert S asked: Me and my partners have started a...

Filed Under Mathematics |

Tagged With , ,

Comments

2 Responses to “How about this?”

  1. fcas80 on April 21st, 2009 11:58 am

    a. x is the RV of rate of return

    b. P(x > 0.55)

    c.
    P(x < 0.55) = P((x - .55) / 0.1) < (.55 - .30) / 0.1) = P(Z < 2.50) = 0.9938.

    P(x > 0.55) = 1 - 0.9938 = 0.0062

  2. mathsmanretired on April 24th, 2009 9:23 pm

    Convert to the standard normal variable z using the formula
    z = (x - mean)/(standard deviation) and then use tables of z. You may have to find P(x > 55) by doing 1 - P(x < 55).