Can someone pls help me in understanding the solution to this problem:
" the probabilities can be taken from a normal table, in which the critical z-values are 2 & 3 and we are including the probabilities in both tails. the probabilities that the exchange rate will be at least 2, or 3 standard deviations away from the mean are:
P(|x-u| >=2std) = 0.0456
P(|x-u|>=3std) = 0.0026
i don t understand the notation, and the corresponding values, unless i’m looking at this problem in the wrong way. PLs help…
Ty for the reply. But the post i posted was the answer. The question reads as follows:
an exchange rate has a given expectrd future value and std deviatio :
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 from mean?
Im co fused on the notationx-u and the values they got as theanswer is what i posted originally???