The Mean Amount Spent by a Family of Four on Food

question 26

Multiple Choice

The mean amount spent by a family of four on food per month is $500 with a standard deviation of $75. Assuming that the food costs are normally distributed, what is the probability that a family spends less than $410 per month?

• A) 0.2158
• B) 0.8750
• C) 0.0362
• D) 0.1151
• E) None of the choices are correct

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Definitions:

Maturity

The date on which the principal amount of a bond, loan, or other financial instrument is due to be paid back to the investors.

Interest Rates

The cost of borrowing money or the reward for saving, typically expressed as a percentage of the principal.

Premium

The amount by which the price of a financial instrument or insurance policy exceeds its face value or the cost above the normal price.