Question 8 Investment products have different probabilities of success. A businessman wishes to invest in two different products, A and B. The following table shows the probability distributions, where P (a, b) represents the probability of success of the investment of A and the ih investment of B, for the values (in thousands of GHe) for A and B invested in 4 different years. Base on this information: (a) A B P(a,b) 3 6 0.3 2 4 0.2 5 3 0.4 1 2 0.1 Which of the investments has a better return and why?

A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
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Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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(b) Which of the investments is relatively less risky and why?
(c)
What type of association exists between the two investment options A and
B? Interpret your results.
Transcribed Image Text:(b) Which of the investments is relatively less risky and why? (c) What type of association exists between the two investment options A and B? Interpret your results.
Question 8
Investment products have different probabilities of success. A businessman wishes to
invest in two different products, A and B. The following table shows the probability
distributions, where P (a, b) represents the probability of success of the ih investment of
A and the ih investment of B, for the values (in thousands of GH¢) for A and B invested
in 4 different years. Base on this information:
(a)
A
B
P(a,b)
3
6
0.3
2
4
0.2
5
3
0.4
1
2
0.1
Which of the investments has a better return and why?
Transcribed Image Text:Question 8 Investment products have different probabilities of success. A businessman wishes to invest in two different products, A and B. The following table shows the probability distributions, where P (a, b) represents the probability of success of the ih investment of A and the ih investment of B, for the values (in thousands of GH¢) for A and B invested in 4 different years. Base on this information: (a) A B P(a,b) 3 6 0.3 2 4 0.2 5 3 0.4 1 2 0.1 Which of the investments has a better return and why?
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