If Profits Are Normally Distributed with a Mean of $12

question 37

Multiple Choice

If profits are normally distributed with a mean of $12 and a standard deviation of $4, there is a 50/50 chance actual profits will exceed:

• A) $12
• B) $8
• C) $16
• D) $4

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, indicating how spread out the values are from the mean.

Variance

A measure of the spread between numbers in a dataset, expressing how much the numbers differ from the average value.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is true, used as a threshold to gauge the strength of the evidence against the null hypothesis.

Standard Deviation

Measures the amount of variance or dispersion of a set of values; a low standard deviation indicates that the values are close to the mean.