Page 59 - FINAL CFA I SLIDES JUNE 2019 DAY 3
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LOS 10.l: Define the standard normal distribution,
explain how to standardize a random variable, and Session Unit 3:
calculate and interpret probabilities using the 10. Common Probability Distributions (C/C/C)
standard normal distribution.
Calculating Probabilities Using z-Values
Use the following data to answer Questions 16 through 18. A study of hedge fund investors found that their annual
household incomes are normally distributed with a mean of $175,000 and a standard deviation of $25,000.
C. z = (100 – 175) / 25 = –3, F(–3) = 1 – 0.9987 = 0.0013
C. 1 – F(2), where F(2) equals 0.9772. Hence, 1 – 0.9772 = 0.0228.
C. 84.13%
