Sure Stone Tire Company Has Established That the Useful Life

question 98

Multiple Choice

Sure Stone Tire Company has established that the useful life of a particular brand of its automobile tires is normally distributed with a mean of 40,000 miles and a standard deviation of 5000 miles.What is the probability that a randomly selected tire of this brand has a life of at least 50,000 miles?

• A)0.0228
• B)0.9772
• C)0.5000
• D)0.4772
• E)1.0000

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Definitions:

Required Rate

The minimum rate of return on an investment that is necessary for it to be considered a viable option by investors or managers.

Yield To Maturity

The total return anticipated on a bond if it is held until it matures, accounting for its current market price, face value, interest payments, and time to maturity.

Annual Coupon

The yearly interest payment made to bondholders, typically expressed as a percentage of the bond's face value.

Par Value

The nominal or face value of a stock or bond. The par value of a bond generally represents the amount of money that the firm borrows and promises to repay at some future date. The par value of a bond is often $1,000 but can be $5,000 or more.