QUESTION 13 Suppose that average household income is normally distributed with a

Question

QUESTION 13 Suppose that average household income is normally distributed with a mean equal to $62,641 and a standard deviation of $10,000. As an employee ofa marketing firm, you are tasked by your supervisor to calculate the dollar amount that should be established if a company wants to market to the highest 5 percent of households by income. Using MicrosoftExcel, the highest 5 percent of household incomes corresponds to an annual income of at least $72,082 S89,253 $79,090 $62,641 O $88,654 O $87,002

Explanation / Answer

z score corresponding to the highest 5% area = 1.645

Hence,

Highest 5% of household incomes = 62641 + 1.645(10000) = $79090

Option C is correct.

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