aston co dec 2008

aston co

when standard deviation is greater than annual cash flow

and we need to calculate probability of default and non default
suppose annual cash flow be $65487 and standard deviation is $ 77818, and we need to calculate probability of default , at this time we will divide annual cash flow by standard deviation that is 65487/77818=0.842, and from normal distribution table we get 0.299. and adding 0.5 we get 0.799 or say 0.8, At this time how can we be sure that non default probability is 80% and default probability is 20%