Suppose That the Returns on an Investment Are Normally Distributed

question 14

Multiple Choice

Suppose that the returns on an investment are normally distributed with an expected return of 10% and standard deviation of 5%.What is the likelihood of making a positive return? (Hint: the area under a curve for 1 std dev is 34.13%,2 std dev is 47.73% and 3 std dev is 49.87%. )

• A)84.13%
• B)2.27%
• C)97.73%
• D)15.87%

---

Definitions:

Current Liability

A company's debts or obligations that are due to be paid to creditors within one year.

Note Payable

An obligation in the form of a written promissory note requiring the borrower to repay the lender a specific sum of money on demand or at a predetermined date.

Interest Payable

This is the amount of interest expense that has accumulated but not yet been paid by a company.

Treasurer's Department

The treasurer's department is responsible for managing a company's financial assets, including cash flow, investments, and corporate financing.