sampling and estimation comprehend, practice, possibly, solution, reading

Flok

curriculum june 2012
quantitative methods,
reading 10 sampling and estimation,
page 580 of curriculum

im unable to comprehend practice problem no.10 . if anyone could possibly explain the solution...

thank you

Zestt

I've curriculum June 2011 . Please mention the question here, it would be easier to answer....

yodacaia

an exchange rate has a given expected future value and standard deviation.
A. assuming that the exchange rate is normally distributed, what are the probabilities that the exchange rate will be at least 2 or 3 standard deviations away from its mean?


B part is about chebyshev's inequality. but im sure, if any one could possibly explain the A part, i will get the B.

thank you

zbird2134

The Z table values for "2" and "3" under the zero column are 0.9772 and 0.9987. Since this question is asking about "at least" 2 or 3 standard deviations, you're looking for the area under the tails on either side of the mean. Which means one minus the area under the curve, times two.

So for 2 standard deviations, the area under the curve based on the Z table value is 0.9772. Which implies area under the tail is (1 - 0.9772) = 0.0228. Ultimately, area under the both the tails, because the normal distribution is symmetrical, is (2 * 0.0228) = 0.0456.

Hope this helps.

Rasec

thank you oyster, you are awesome. now it makes perfect sense...
thank you belaal for directing me how to ask the question...