Based on historical information, the distribution of the annual return on Flavorite stock depends on market conditions. The expected annual return for (1) a boom market, (2) an up market, (3) a flat market, (4) a down market, and (5) a crash are shown in the center colum as xi's. The historical probability of each market condition is shown in the right colum as pi's. a. What is the expected annual return of Flavorite stock? b. What is the variance of the annual return of Flavorite stock? c. What is the standard deviation of the annual return of Flavorite stock? d. Assume you work for Flavorite, and are offered a deal to purchase company stock at the beginning of the year. For a fixed fee of 1%, the company will double your annual return on company stock. Using the rules for scaling and translation distributions, what is the expected return on this stock deal? What is the standard deviation of the return on this stock deal?      xi pi 1 Boom Market 21%                0.12 2 Up Market 10%                0.28 3 Flat Market 6%                0.35 4 Down Market -2%                0.19 5 Crash -13%                0.06

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Contingency Table

A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.

Binomial Distribution

Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.