The stock returns are normally distributed

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Reference no: EM131903261

1. The returns of Tiger Inc. stock over the last four years were 13 percent; 17 percent; 0 percent; and 18 percent. Determine the 68 percent probability range, if the stock's returns are normally distributed.

A. -14.11 percent to 37.23 percent

B. 1.78 percent to 19.27 percent

C. 3.71 percent to 20.29 percent

D. -4.58 percent to 28.58 percent

2. Precision Tool is trying to decide whether to lease or buy some new equipment for its tool and die operations. The equipment costs $56,000, has a 3-year life and will be worthless after the 3 years. The pre-tax cost of borrowed funds is 6 percent and the tax rate is 33 percent. The equipment can be leased for $19,500 a year. What is the net advantage to leasing? (Do not round intermediate calculations.)

$282

$3,023

$2,669

$1,403

$-1,985

Reference no: EM131903261

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