You are trying to develop a strategy for investing in two different stocks. The anticipated annual return for a $1,000 investment in each stock under four different economic conditions has the probability distribution shown to the right. Table of values is given in picture. A.Compute the expected return for stock X and stock Y. B.Compute the standard deviation for stock X and stock Y. C.Would you invest in Stock Y or Stock X.?
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 trying to develop a strategy for investing in two different stocks. The anticipated annual return for a $1,000 investment in each stock under four different economic conditions has the probability distribution shown to the right. Table of values is given in picture.
A.Compute the expected return for stock X and stock Y.
B.Compute the standard deviation for stock X and stock Y.
C.Would you invest in Stock Y or Stock X.?
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