If a random variable is drawn from a normal distribution, what is the probabilit
ID: 2702846 • Letter: I
Question
If a random variable is drawn from a normal distribution, what is the probability that the random variable is larger than 1.96 standard deviations larger than the mean?
A
1.25%
B
2.50%
C
3.75%
D
5.00%
Bond price: Jeremy Kohn is planning to invest in a 10-year bond that pays a 12 percent coupon. The current market rate for similar bonds is 9 percent. Assume semiannual coupon payments. What is the maximum price that should be paid for this bond? (Round to the nearest dollar.)
A
$951
B
$882
C
$1,033
D
$1,195
Given the returns for two stocks with the following information, calculate the correlation coefficient of the returns for the two stocks. Assume the expected return for Stock 1 is 10.8 percent and 9.7 percent for Stock 2.
A
0.230967
B
If a random variable is drawn from a normal distribution, what is the probability that the random variable is larger than 1.96 standard deviations larger than the mean?
A
1.25%
B
2.50%
C
3.75%
D
5.00%
Bond price: Jeremy Kohn is planning to invest in a 10-year bond that pays a 12 percent coupon. The current market rate for similar bonds is 9 percent. Assume semiannual coupon payments. What is the maximum price that should be paid for this bond? (Round to the nearest dollar.)
A
$951
B
$882
C
$1,033
D
$1,195
Given the returns for two stocks with the following information, calculate the correlation coefficient of the returns for the two stocks. Assume the expected return for Stock 1 is 10.8 percent and 9.7 percent for Stock 2.
A
0.230967
B
Explanation / Answer
1.) B
2.) D
3.) A
4.) B
5.) C
6.) C
7.) E
8.) A
9.) D
10.) B
11.) C
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