Reference no: EM13982862
1. The Federal Funds rate in spring 2007 was approximately normal with µ = 5.25% and cr = 0.05%. Find the probability that the rate on a given day will be less than 1.1%.13
2. Thirty-year ?xed mortgage rates in April 2007 seemed normally distributed with mean 6.17%.14 The standard deviation is believed to be 0.25%. Find a bound such that the probability that the actual rate obtained will be this number or below it is 90%.
3. A project consists of three phases to be completed one after the other. The duration of each phase, in days, is normally distributed as follows: Duration of Phase I - N(84, 32); Duration of Phase II - N(102, 42); Duration of Phase III - N(62, 22). The durations are independent.
a. Find the distribution of the project duration. Report the mean and the standard deviation.
b. If the project duration exceeds 250 days, a penalty will be assessed. What is the probability that the project will be completed within 250 days?
c. If the project is completed within 240 days, a bonus will be earned. What is the probability that the project will be completed within 240 days?
Calculate the value at risk
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: a. Find the distribution of the project duration. Report the mean and the standard deviation. b. If the project duration exceeds 250 days, a penalty will be assessed. What is the probability that the project will be completed within 250 days?
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