Question

The closing price of Schnur Sporting Goods Inc. common stock is uniformly distributed between $16 and $34 per share.

What is the probability that the stock price will be:

1. More than $28?

2. Less than or equal to $24?

Answer 1

We have uniform distribution with range 16 and 34 .

The pdf of uniform distribution is given by,
, a x b

Here a = 16, b = 34

The cdf of Uniform distribution is,

1) More than $28.

p ( x > 28 ) = 1 - p( x 28 )

= 1 - 0.6667

= 0.3333

2) Less than or equal to 24

p ( x 24 )

= 0.4444