The net profit from a certain investment is normally distributed with a mean of $10,000 and a standard deviation of $5,000. The probability that the investor will not have a net loss is:
A) 0.4772
B) 0.9544
C) 0.0228
D) 0.9772
E) 1.0

Question

Quizplus · Accepted Answer

To find the probability of not having a net loss, we need to find the probability of having a net profit greater than zero. We can use the standard normal distribution to find the corresponding z-value:

z = (0 - 10,000) / 5,000 = -2

Using a standard normal table or calculator, we can find the probability that Z is greater than -2:

P(Z > -2) = 0.9772

So the probability of not having a net loss is 0.9772, or choice D.

The Net Profit from a Certain Investment Is Normally Distributed