You are considering three investments alternatives for some spare cash: Old Reliable Corp (A1), Fly-By-Nite Cargo Co. (A2) and a fed insured savings certificate (A3). You expect the economy will either "boom" (N1) or "bust" (N2), and you estimate that a boom is likely (p1 = 0.6) than a bust (p2 = 0.4). Outcomes for the three alternatives are expected to be (1) $2000 in boom or $500 in bust for Old Reliable Co; (2) $6000 in boom, but $5000 (loss) in bust for Fly-By-Nite; and (3) $1200 for fed insured savings certificate in either case. NOT USING EXCEL set up a pay payoff table (decision matrix) for this problem and show which alternative maximixes expected value.
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.
You are considering three investments alternatives for some spare cash: Old Reliable Corp (A1), Fly-By-Nite Cargo Co. (A2) and a fed insured savings certificate (A3). You expect the economy will either "boom" (N1) or "bust" (N2), and you estimate that a boom is likely (p1 = 0.6) than a bust (p2 = 0.4). Outcomes for the three alternatives are expected to be (1) $2000 in boom or $500 in bust for Old Reliable Co; (2) $6000 in boom, but $5000 (loss) in bust for Fly-By-Nite; and (3) $1200 for fed insured savings certificate in either case. NOT USING EXCEL set up a pay payoff table (decision matrix) for this problem and show which alternative maximixes
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