The random variable it denotes the effective rate of interest p.a. from time t - 1 to time t, for t = 1, 2, 3, Each year the value of (1 + it) has a lognormal distribution with parameters μ = 0.06 and o² = 0.08. Calculate the probability that a single investment made at time t = 0 will accumulate to more than double of its initial investment in 10 years' time. Give your answer in three decimal places.

A First Course in Probability (10th Edition)
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Chapter1: Combinatorial Analysis
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The random variable it denotes the effective rate of interest p.a. from time t - 1 to time t, for t = 1, 2, 3,
Each year the value of (1 + i) has a lognormal distribution with parameters µ = 0.06 and o² = 0.08.
Calculate the probability that a single investment made at time t = 0 will accumulate to more than
double of its initial investment in 10 years' time.
Give your answer in three decimal places.
Transcribed Image Text:The random variable it denotes the effective rate of interest p.a. from time t - 1 to time t, for t = 1, 2, 3, Each year the value of (1 + i) has a lognormal distribution with parameters µ = 0.06 and o² = 0.08. Calculate the probability that a single investment made at time t = 0 will accumulate to more than double of its initial investment in 10 years' time. Give your answer in three decimal places.
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