The expected rate of return for the coming year on FTC common stock is normally distributed with a mean of 14% and a standard deviation of 7%. Determine the probability of earning a negative rate of return (i.e. less than 0%) on FTC common stock.
A) 0.0228
B) 2.00
C) 0.5000
D) 0.9772
(Note: Table V is required to work this problem.)

Question

Quizplus · Accepted Answer

Solution:
z = (0% - 14%) / 7% = -2.0; From Table V, p = 2.28%

The Expected Rate of Return for the Coming Year on FTC