For Some Value of Z,the Probability That a Standard Normal

question 105

Multiple Choice

For some value of Z,the probability that a standard normal variable is below Z is 0.2090.The value of Z is

• A) −0.81.
• B) −0.31.
• C) 1.96.
• D) 0.31.

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Definitions:

Intrinsic Value

The actual, fundamental value of an asset, irrespective of its market value, determined through objective calculation or estimation.

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and attract funds.

Projects

Planned sets of interrelated tasks to be executed over a fixed period and within certain cost and other limitations.

Risk Premium

A risk premium is the additional return expected by an investor for taking on a higher level of risk, compared to a risk-free investment.