A Random Variable Is Normally Distributed with a Mean of 25

question 26

Multiple Choice

A random variable is normally distributed with a mean of 25 and a standard deviation of 5. If an observation is randomly selected from the distribution, determine two values of which the smallest has 25% of the values below it and the largest has 25% of the values above it.

• A) 18.85 and 27.94
• B) 19.31 and 21.12
• C) 16.23 and 18.82
• D) 21.65 and 28.35

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Definitions:

Acceptable Investments

Financial assets or securities deemed suitable for purchase based on an investor's risk tolerance, investment strategy, and financial goals.

Payback Periods

The length of time required to recover the original investment cost through the generated returns.

Profitable

A financial state where earnings exceed expenses, resulting in a positive net income.

Discount Rate

The discount rate applied in DCF analysis to calculate the current value of future cash flows.