Question

The closing price of Schnur Sporting Goods Inc. common stock is uniformly distributed between $16 and $27 per share. What is the probability that the stock price will be a. More than $21? (Round your answer to 4 decimal places.) ces b. Less than or equal to $22? (Round your answer to 4 decimal places.)

Answer 1

The closing price of Schnur Sporting Inc. common stock is uniformly distributed between $16 and $27 that is a = 16 and b = 27

a) P(More than $21) that is P(X > 21)

The formula of distribution function of uniform distribution is,

$P(X\leq x) = \frac{x - a}{b - a}$

P(X > 21) can be written as,

P(X > 21) 1- PX 21

$P(X\leq 21) = \frac{21-16}{27-16} = 0.4545$

$P(X> 21)= 1 - P(X\leq 21) = 1 - 0.4545 = 0.5455$

The probability that stock price will be more than $21 is 0.5455

b) P(Less than or equal to $22) that $P(X\leq 22)$

By using distribution function, the probability is

$P(X\leq 22) = \frac{x-a}{b-a} = \frac{22-16}{27-16} = 0.5455$

The probability that stock price will be less than or equal to $22 is 0.5455