An amount of $10,000 is to be invested for three years. The yield rate for the first year will beequally likely to be 5%, 6%, 7%, 8% or 9%; for the second year will be equally likely to be 7% or9%; for the third year will be 7%, 8% or 9% with probabilities 0.3, 0.5 and 0.2, respectively. Theyield rates in different years are independent. Find the probability that the accumulation of theinvestment for the three years will be greater than its expected value.

Answered: Image /qna-images/answer/cb99979f-2bad-4e5d-bd2d-cf74d7f32ff1.jpg

Answered: An amount of $10,000 is to be invested…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

See similar textbooks

Similar questions

Johnson Chemicals is considering two options for its supplier portfolio. Option 1 uses two local suppliers. Each has a "unique-event" risk of 4.5%, and the probability of a "super-event" that would disable both at the same time is estimated to be 1.3%. Option 2 uses two suppliers located in different countries. Each has a "unique-event" risk of 14%, and the probability of a "super-event" that would disable both at the same time is estimated to be 0.18%. a) The probability that both suppliers will be disrupted using option 1 is ____ (round your response to five decimal places). b) The probability that both suppliers will be disrupted using option 2 is _____ (round your response to five decimal places).
You purchase a brand new car for $15,000 and insure it. The policy pays 78% of the car's value if there is an issue with the engine or 30% of the car's value if there is an issue with the speaker system. The probability of an issue with the engine is 0.009, and the probability there is an issue with the speaker system is 0.02. The premium for the policy is p. Let X be the insurance company's net gain from this policy. (a) Create a probability distribution for X, using p to represent the premium on the policy. Enter the possible values of X in ascending order from left to right. P(X) (b) Compute the minimum amount the insurance company will charge for this policy. Round your answer to the nearest cent
A lottery offers one $2000 prize, one $900 prize and five $200 prizes.One thousand tickets are sold at $5 each. Find the expectation if a person buys oneticket.
Suppose an oil company is thinking of buying some land for $10,000,000. There is a 60%60% chance of economic growth and a 40%40% chance of recession. The probability of discovering oil is 44%44% when there is economic growth and 32%32% when there is a recession. If there is economic growth and the oil company discovers oil, the value of the land will triple. If they do not discover oil, the value of the land will decrease by 10%.10%. If there is a recession and the company discovers oil, the value of the land will increase by 50%.50%. If they do not discover oil, the land will decrease in value by 75%.75%. What is the expected value of the investment? Give your answer to the nearest dollar. Avoid rounding within calculations. $$ Select the correct interpretation of the expected value. The expected value represents what the actual investment value will be for this land purchase of $10,000,000. The company should make the investment because the expected value…
A payoff table is given as S1 S2 S3 D1 250 750 500 D2 300 -250 1200 D3 500 500 600 a. What choice should be made by the optimistic decision maker? b. What choice should be made by the conservative decision maker? c. What decision should be made under minimax regret? d. If the probabilities of d1, d2, and d3 are .2, .5, and .3 respectively, then what choice should be made under expected value?
You are a bitcoin trader. You have $1,000,000, and today one bitcoin costs $2000. Tomorrow bitcoins will either cost $1000 or $4000, each with equal probability. (Solve using discrete mathematics).For each of the following, give a strategy and why it’s correct:(a) If you want to maximize the expected amount of money you havetomorrow, what should you do?(b) If you want to maximize the expected number of bitcoins you have tomorrow, what should you do?
< CO 2. There is a 0.9987 probability that a randomly selected 32 year-old male lives through the year. A life insurance company charges $169 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $110,000 as a death benefit. (a) From the perspective of the 32 year old male, what are the monetary values corresponding to the two events of surviving the year and not surviving? The value corresponding to surviving the year is $ The value corresponding to not surviving the year is $ (b) If 32 year-old male purchases the policy, what is his expected value? The expected value is $ (Round to the nearest cent as needed.) « Previous Next » LAON 23 3D 昌吧 MacBook Air 000 000 DD F7 公 F3 F4 F5 F6 F8 $ 4 5. 6 80
PLSS ANSWER ASAP!!
Suppose a neighborhood grocery store buys 5 containers of skim milk at the wholesale price of $11 per container and sells it for $22 per container. After the expiration date, unsold milk is removed from the shelves and the grocer receives a credit from the distributor equal to three-fourths of the wholesale price. If the probability distribution of the variable is X and the number of containers sold from this lot is x f(x) 0 1/15 1 2/15 2 2/15 3 3/15 4 4/15 5 3/15 Calculate the expected utility. (Round to two decimal places)
You have done risk analysis and determine the following risks and their probabilities could affect your project. Based on these risks, what should you contingency reserve be? Risk 1: 50% chance of a weather delay costing $5,000Risk 2: 20% chance of a worker strike costing $10,000Risk 3: 10% chance of catastrophic failure costing $50,000
Refer to the following payoff table: State of Nature Alternative S1 S2 A1 75 −40 A2 0 100 Prior Probability 0.6 0.4 There is an option of paying $100 to have research conducted to better predict which state of nature will occur. When the true state of nature is S1, the research will accurately predict S1 60% of the time. When the true state of nature is S2, the research will accurately predict S2 80% of the time. What is the posterior probability of S1 given that the research predicts S1? Multiple Choice: 0.18 0.82 0.57 0.44 0.65
H6.

SEE MORE QUESTIONS

Recommended textbooks for you

A First Course in Probability (10th Edition)

Probability

ISBN:

9780134753119

Author:

Sheldon Ross

Publisher:

PEARSON

A First Course in Probability

Probability

ISBN:

9780321794772

Author:

Sheldon Ross

Publisher:

PEARSON

A First Course in Probability (10th Edition)

Probability

ISBN:

9780134753119

Author:

Sheldon Ross

Publisher:

PEARSON

A First Course in Probability

Probability

ISBN:

9780321794772

Author:

Sheldon Ross

Publisher:

PEARSON

SEE MORE TEXTBOOKS