• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

pls help needed urgently...Inter-quartile range???

P

peacep

Member
I saw this question the past exam of September 2001 Q.5

(1 + it) follows a log normal distribution where it is the rate of interest over a given time period beginning at time t. The parameters of the distribution are
μ = 0.06 and σ2 = 0.0009. Calculate the inter-quartile range for the accumulation of 100 units of money over the given time period, beginning at time t.

From the solution I can tell it's meant to be easy-peasy but I've not being able to get how it was solved or what was done:confused:. Can someone please break it down for me. Thanks guys.
 
That's an old one!!

The accumulated value is 100 (1+i). If the lower and upper quartiles are L and U respectively, then:
P(100(1+i)<L) = 0.25
P(100(1+i)<U) = 0.75

Do the usual Normal standardisation on each of these, look up the values of phi on page 162 of the Tables and use it to finish off.
 
You must log in or register to reply here.
Back
Top