standard deviation problem

[kalee]

Investment A has expected return of 25mil and investment B has expected return of 5 mil. The SD from A is 10mil and for B is 30mil. If you assume returns follow a normal distribution which investment would give a better chance of getting at least a 40 million return?

 

[Deleted member 4993]

Investment A has expected return of 25mil and investment B has expected return of 5 mil. The SD from A is 10mil and for B is 30mil. If you assume returns follow a normal distribution which investment would give a better chance of getting at least a 40 million return?

Here you need to calculate z-score and use look-up tables.

Please share your work with us, indicating exactly where you are stuck - so that we may know where to begin to help you.

 

[kalee]

I figured the avg for both which is 15

for A 40-15/10=2.5

for B 40-15/30= 0.83

 

[Deleted member 4993]

I figured the avg for both which is 15

for A 40-15/10=2.5

for B 40-15/30= 0.83

So what probabilities do these z-scores relate to - according to the look-up table?

Remember you are looking for at least 40 million.

 

[kalee]

for A is 99% for B 79.5%

is this the correct way to figure this problem?