ScantronAssignment3-R07

ScantronAssignment3-R07 - MGMT 3100 HOMEWORK ASSIGNMENT #3...

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MGMT 3100 HOMEWORK ASSIGNMENT #3 NOTE1: Questions 1-50 = 4 points each, Questions 51-100 = 13 points each NOTE3: YOU ONLY NEED TO TURN IN YOUR SCANTRONS FOR THIS ONE PROBLEM 1 (harder) You invested $10,000 in a certain stock on January 1 st , 2007. By examining past movements of this stock and checking up with your broker, you estimated that the annual return for the stock (call it X and express it as a percentage), is normally distributed with mean = 10% and standard deviation 4%. On December 31 st , 2007, your investment will have grown to $10,000(1 + X) and you will sell the stock. Because you are in the 33% bracket (I’m assuming you guys have money), you will owe the IRS 33% of this profit. **Question 51. What is the approximate probability that you will have to pay the IRS at least $400? a) 0% b) 70.2% c) 29.8% d) 33% e) none of the above *Question 1. What is the lowest approximate rate of return (X), which you are 90% sure you will NOT make? a) 0% b) 15.13% c) 10% d) 14% e) none of the above **Question 52. What is the lowest approximate after tax profit (in $) which you are 90% sure you will NOT exceed? a) $1513 b) $1000 c) $1013 d) $600 e) none of the above PROBLEM 2 The Fabulous Fabrics Company runs a manufacturing facility that produces bolts of woolen fabric. A certain amount of other fibers are also woven into the wool. The proportion of those other fibers
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ScantronAssignment3-R07 - MGMT 3100 HOMEWORK ASSIGNMENT #3...

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