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%