8.14 Self-correcting exercise. The time required to assemble an electronic component is normally
distributed, with a mean of 12 minutes and a standard deviation of 1.5 minutes. Find the probability that a
particular assembly takes:
a) less than 14 minutes
b) less than 10 minutes
c) more than 14 minutes
d) more than 8 minutes
e) between 10 and 15 minutes.
8.17 Empirica studies have provided support for the belief that the annual rate of return of an ordinary
share is approximately normally distributed. Suppose that you have invested in the shares of a company
for which the annual return has an expected value of 16% and a standard deviation of 10%.
a) Find the probability that your one-year return will exceed 30%.
b) Find the probability that your one-year return will be negative,
c) Suppose that this company embarks on a new, high-risk, but potentially highly profitable venture. As a
result, the return on the share now has an expected value of 25% and a standard deviation of 20%.
Answer parts (a) and (b) in light of the revised estimates regarding the share’s return,
d) As an investor, would you approve of the company’s decision to embark on the new venture?
8.19 Travelbuys is an internet-based travel agency on whose website customers can see videos of the
cities they plan to visit. The number of hits daily is a normally distributed random variable with a mean of
