Question

Free cash flow per share for a population of companies is approximately normal, has a mean of $2.50, and a standard deviation of $0.50. The probability that a firm chosen at random will have cash flow per share of less than $2.00 is:

A. 16%.

B. 50%.

C. 84%.

Answer 1

In order to solve this question we have to follow 2 steps

step 1

find z score using the following formula:-

therefore we get a z value of -1

Step 2

now check the corresponding value in the z table .

as we can see the corresponding value in z table is 0.1587 or 15.87% or 16% approx

Therefore the correct answer is 16%