Suppose the Round Trip Airfare Between Boston and Orlando Follows

question 2

Multiple Choice

Suppose the round trip airfare between Boston and Orlando follows the normal probability distribution with a mean of $387.20 and a standard deviation of $68.50.What is the probability that a randomly selected airfare between Boston and San Francisco will be more than $450?

• A) 0.1788
• B) 0.0788
• C) 0.3369
• D) 0.2033

---

Definitions:

Investment Opportunity Set

The array of all possible investment combinations available to an investor considering both risk and return.

Global Minimum-Variance Portfolio

The Global Minimum-Variance Portfolio is an investment portfolio constructed to achieve the lowest possible level of risk (variance) for its expected return, using assets from around the world.

Perfectly Negatively Correlated

A relationship between two securities in which one's price moves in the opposite direction of the other's, resulting in a correlation coefficient of -1.

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points, often used in finance to quantify the risk of an investment.