# A record producer knows that the profit on the release of a new compact disc (CD) by his premier… 1 answer below »

A record producer knows that the profit on the release of a new compact disc (CD) by his premier artists has a normal distribution with a mean of \$1,250,000 and a standard deviation of \$500,000. One of his premier artist is about to release a new CD.

i). What is the probability that the release of the CD makes a loss (profit less than zero)?

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

ii). What is the level of profit from the CD release that there is a 10% chance of exceeding?

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

iii) The producer has 4 premier artists all releasing CDs shortly. The profits on the CDs are independent, and each will have a normal distribution with a mean of \$1,250,000 and a standard deviation of \$500,000. What is the probability that the average profit from the 4 CDs exceeds \$1,500,000?

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________

________­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________