Normal Distribution, Time Value of Money
1.Consider the normal distributions drawn below (with different scales)
They both have m = 20 and the area of the shaded region of each is 0.90. Which of the following holds?
a. x1 < x2
b. x1 > x2
c. x1 = x2
d. There is not enough information
e. x1 >= x2
2.If you deposit $5000 into a fund paying 6% interest compounded quarterly, how much can you withdraw at the end of each quarter for 5 years?
a. $135.92
b. $970.45
c. $291.23
d. $215.17
e. none of the above
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1.Consider the normal distributions drawn below (with different scales)
They both have m = 20 and the area of the shaded region of each is 0.90. Which of the following holds?
a. x1 < x2
b. x1 > x2
c. x1 = x2
d. There is not enough information
e. x1 >= x2
Answer: a. x1 < x2
The standard deviation for b) s= 8 is greater than that of a) s= 5.
This means that the spread around the mean is more for b) than for a)
Thus ...
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Answers Multiple choice questions on Normal Distribution, Time Value of Money.