Q: The forecast monthly revenues for a firm are modeled using a random variable that is distributed according to a normal distribution with mean $850,000 and standard deviation $165,000.
What is the probability that the revenues will be less than $700,000? Choose the closest numerical answer.
or
Q: A random variable distributed according to a normal distribution with a mean of $850,000 and a standard deviation of $165,000 is used to represent a company’s anticipated monthly sales.
How likely is it that revenues will fall short of $700,000? Select the solution with the closest number.
- 0.90
- 0.10
- 0.50
- 0.82
- 0.27
- 0.73
- 0.18
Explanation: Thus, the probability that the revenues will be less than $700,000 is approximately 0.18. This indicates that there is an 18% chance that the firm’s revenues will fall below that threshold in any given month, according to the normal distribution model used for forecasting.
