Question

Suppose the mean income of firms in the industry for a year is 95 million dollars with a standard deviation of 11 million dollars. If incomes for the industry are distributed normally, what is the probability that a randomly selected firm will earn less than 114 million dollars? Round your answer to four decimal places.

Answer 1

Answer:

Given,

To determine the probability that a randomly selected firm will earn less than 114 million dollars

Mean = = 95

Standard deviation = = 11

We convert this to standard normal as

P(X < x) = P( Z < (x - ) / )

substitute values

P( X < 114) = P( Z < 114 - 95 / 11)

= P( Z < 1.7273)

P( X < 114) = 0.9579