Question

The closing price of Schnur Sporting Goods Inc. common stock is uniformly distributed between $18 and $36 per share.What is the probability that the stock price will be:More than $28? (Round your answer to 4 decimal places.)Less than or equal to $25? (Round your answer to 4 decimal places.)

Answer 1

Answer:

price below 25: 25.2493%

price above 28: 36.9441%

Explanation:

median = (min + max) / 2 = (18 + 36) / 2 = 27

standard deviation: in a normal distribution all values are among 6 standard deviaiton:  (36 - 18) / 6 = 3

We need to convert the values into a normal distribution of (0;1)

Probability of less than 25:

(X - median) / standard deviation = (25 - 27) / 3 = -0.66667

Now, we look into the normal distribution for this value

P(z< -0.6667) = 0.252492538

Probability of more than 28

1 - probability of less than 28

normalization:

(X - median) / standard deviation = (28 - 27) / 3 = 0.33333

1 - P(z<0.33333)

1 - 0.63055866 = 0.36944134