00:01
We're looking at a normal distribution.
00:02
I'm going to start by drawing it.
00:04
So in 3a, we have this normal curve representing an investment portfolio.
00:11
Its mean is 500 ,000.
00:15
Its standard deviation is 15 ,000.
00:19
Total area under this curve is 1, or 100%, and it is symmetric.
00:24
We want the probability that the value falls between 485 ,000, which is below the mean, and 530 ,000, which is above the mean.
00:39
So we're looking at this area in between.
00:42
Now it's unreasonable to integrate the function for this.
00:45
You have to find something with the normal distribution built into it.
00:48
That could be a z -score table, it could be software like excel.
00:51
I'm going to use my ti -84 calculator with the normal cdf function.
00:57
It has four inputs, lower bound, upper bound, mean, and standard deviation.
01:02
Deviation.
01:02
So we're going from 485 ,000 to 530 ,000, mean 500 ,000, standard deviation 15 ,000...