- CFA Exams
- CFA Level I Exam
- Study Session 3. Quantitative Methods (2)
- Reading 9. Common Probability Distributions
- Subject 8. The Standard Normal Distribution

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**CFA Practice Question**

A study of a company's practice regarding the payment of invoices revealed that on average, an invoice was paid 20 days after it was received. The standard deviation equaled five days. Assuming that the distribution is normal, what percent of the invoices were paid within 15 days of receipt?

A. 34.13%

B. 37.91%

C. 15.87%

**Explanation:**z = (x-μ)/σ = (15 - 20)/5 = -1.0. z = 1 is 0.8413. 1.0 - 0.8413 = 0.1587

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**User Contributed Comments**
7

User |
Comment |
---|---|

coops |
don't we need a Z-table to answer this? |

jonaszam |
how do we know which Z-Table to use? |

dimanyc |
Mu=20, one st dev interval is 15 to 25 = 68%, so the left side is 34%. Less than 15% = 50%-35%=15%. |

StanleyMo |
hmm, i would say 34% is on both side, so we assume around 17% on right and left. |

mazurin |
where did you get 34%. May be 32%? 100-68=32 |

rsanfo |
about 68% of values are within 1 standard deviation of the mean. 32% remains (16% per tail). "paid within 15 days" means just one tail, so the answer is the one closest to 16%. |

EEEEvia |
I got the z-score but I didn't really get the question at first.. |