Hey guys I’m a little confused about z-scores.

In reading 9, question 14 C, it asks What is the probablility that the return on the safety-first optimal portfolio will be less that the short fall level, R(L)?

I calculated the z-score to be .53 (correct) which equals 70.19%, but the answer shows it’s 1-0.7019 = 29.81%…

If I’m looking for the level below the short fall level, why would I use ‘1-’? Doesn’t that give the area above the short fall?


Technically, the z-score is not +0.53; it’s −0.53 : your minimum acceptable return is below the mean return, not above it.

F(−_z_) = 1 − F(z)