The standard deviation of expected returns for time period

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Reference no: EM132028563

1. An investor expects a mean cash flow in time period 3 from an investment project of $70,000. What is the probability that the cash flow in time 3 will be less than $30,000 and greater than 110,000? The probability distribution of cash flows is approximately normal. The standard deviation of expected returns for this time period is $20,000.

z = 1 Probability = 0.3413

z = 2 Probability = 0.4772

z = 3 Probability = 0.4987

Select one:

a. 95%

b. 5%

c. 95.44%

d. 0.0456

e. 99.72%

2. An investor expects a mean cash flow in time period 3 from an investment project of $70,000. What is the probability that the cash flow in time 3 will be between $90,000 and $50,000? The probability distribution of cash flows is approximately normal. The standard deviation of expected returns for this time period is $10,000.

z = 1 Probability = 0.3413

z = 2 Probability = 0.4772

z = 3 Probability = 0.4987

Select one:

a. 95%

b. 5%

c. 95.44%

d. 2.28%

e. 99.72%

Reference no: EM132028563

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