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Venture A Earnings -10 Probability 0.3 50 0.4 60 0.3 Venture B Earnings -5 Probability 0.1 30 0.3 40 0.6 ) Compute the mean and variance for Venture A. x dollars x dollars? 35 ean ariance 885 mpute the mean and variance for Venture B

Venture A Earnings -10 Probability 0.3 50 0.4 60 0.3 Venture B Earnings -5 Probability 0.1 30 0.3 40 0.6 ) Compute the mean and variance for Venture A. x dollars x dollars? 35 ean ariance 885 mpute the mean and variance for Venture B

A First Course in Probability (10th Edition)
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...
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Paul Hunt is considering two business ventures. The anticipated returns (in thousands of dollars) of each venture are described by the following probability distributions. Venture A Earnings -10 Probability 0.3 50 0.4 60 0.3 Venture B Earnings Probability -5 0.1 30 0.3 40 0.6 (a) Compute the mean and variance for Venture A. 35 X dollars mean variance 885 x dollars? Compute the mean and variance for Venture B. 32.5 X dollars mean variance x dollars? 176.25 (b) Which investment would provide Paul with the highest expected return (the greater mean)? O Venture A O Venture B (c) In which investment would the element of risk be less (that is, which probability distribution has the smaller variance)? O Venture A O Venture B
Transcribed Image Text:Paul Hunt is considering two business ventures. The anticipated returns (in thousands of dollars) of each venture are described by the following probability distributions. Venture A Earnings -10 Probability 0.3 50 0.4 60 0.3 Venture B Earnings Probability -5 0.1 30 0.3 40 0.6 (a) Compute the mean and variance for Venture A. 35 X dollars mean variance 885 x dollars? Compute the mean and variance for Venture B. 32.5 X dollars mean variance x dollars? 176.25 (b) Which investment would provide Paul with the highest expected return (the greater mean)? O Venture A O Venture B (c) In which investment would the element of risk be less (that is, which probability distribution has the smaller variance)? O Venture A O Venture B
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