A construction company in Naples, Florida, is struggling to sell
condominiums. In order to attract buyers, the company has made
numerous price reductions and better financing offers. Although
condominiums were once listed for $300,000, the company believes
that it will be able to get an average sale price of $220,000. Let
the price of these condominiums in the next quarter be normally
distributed with a standard deviation of $18,000. [You may
find it useful to reference the z
table.]
a. What is the probability that the condominium
will sell at a price (i) Below $195,000?, (ii) Above $254,000?
(Round "z" value to 2 decimal places and final
answers to 4 decimal places.)
b. The company is also trying to sell an artist’s
condo. Potential buyers will find the unusual features of this
condo either pleasing or objectionable. The manager expects the
average sale price of this condo to be the same as others at
$220,000, but with a higher standard deviation of $23,000. What is
the probability that this condo will sell at a price (i) Below
$195,000?, (ii) Above $254,000? (Round your answers to 4
decimal places.)
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