## CFA L1 Quants quiz 4

vishnu.ftw
Good Student
Posts: 22
Joined: Wed Apr 03, 2013 5:01 pm

### CFA L1 Quants quiz 4

A normal distribution has a mean of 39 and a variance of 625. The area under the distribution between 50 and 75 equals ________.
a. 0.745
b. 0.319
c. 0.255

First note that the area between two numbers under a probability distribution is the same as the probability of getting a number between those two numbers. The standard deviation of the distribution equals sqrt(625) = 25. The z-value of 50 equals (50-39)/25 = 0.44. The z-value of 75 equals (75-39)/25 = 1.44. Using the Normal probability tables, we get P(z < 0.44) = 0.67 and P(z < 1.44) = 0.9251. The area between 50 and 75 is then given by P(0.44 < z < 1.44) = P(z < 1.44) - P(z < 0.44) = 0.9251 - 0.67 = 0.255.
Incorrect
Marks for this submission: 0/1.

do we get z-value in the exam, or a z-table?

lokesh1
Good Student
Posts: 17
Joined: Tue Apr 09, 2013 10:22 am

### CFA L1 Quants quiz 4

Hey Vishnu

You are supposed to memorize the z-values that would be used to create confidence intervals (both ONE and TWO Tail) with 1%, 5% and 10% level of significance.

Other than these, if required would be supplied to you.