Replacement Times for TV Sets Are Normally Distributed with a Mean

question 125

Short Answer

Replacement times for TV sets are normally distributed with a mean of 8.2 years and a standard deviation of 1.1 years, (based on data from "Getting Things Fixed," Consumer Reports).

-If you want to provide a warranty so that only 3% of the TV sets will be replaced before the warranty expires, the length of warranty you would recommend would be _____years.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.

Liquidity

The simplicity of converting an asset or security into cash without impacting its market value.

P/E Ratio

The price-to-earnings ratio, a valuation metric comparing the current share price of a company to its per-share earnings.

ROE

Return on Equity, a financial ratio that measures a company's profitability relative to the equity.