
(A)
The expected value of each option is to be calculated.
(A)

Explanation of Solution
Expected value is calculated as
Consider an option 1,
=
Consider an option 2,
Therefore, in both the options, expected value is 450.
(B)
The variance and standard deviation of each option is to be calculated.
(B)

Explanation of Solution
Variance is calculated as
σ = [ q1(x1 - (E(x))2 + q2(x2 - (E(x))2 + ................+ qn(xn - (E(x))2 ]
Standard deviation is the square root of variance.
SD =
Consider an option 1,
σ =
=
=
=
=
Consider an option 2,
σ =
=
=
=
=
Variance in option 1 is 157500 and in option 2 is 279270.
Standard deviation is the square root of variance.
SD = v σ
Consider an option 1,
Consider an option 2,
Variance of option 1 is 157500 and variance of option 2 is 279270.
Standard deviation of option 1 is 396.86 and standard deviation of option 2 is 528.46.
(C)
The option that is riskier to be ascertained.
(C)

Explanation of Solution
Basically, the option with high variability is more risky option.
Higher variability means high variance or standard deviation.In this question, Option 2 has more variance and standard deviation. Thus, it is riskier.
The riskier option is Option 2.
Want to see more full solutions like this?
- how commond economies relate to principle Of Economics ?arrow_forwardCritically analyse the five (5) characteristics of Ubuntu and provide examples of how they apply to the National Health Insurance (NHI) in South Africa.arrow_forwardCritically analyse the five (5) characteristics of Ubuntu and provide examples of how they apply to the National Health Insurance (NHI) in South Africa.arrow_forward
- Outline the nine (9) consumer rights as specified in the Consumer Rights Act in South Africa.arrow_forwardIn what ways could you show the attractiveness of Philippines in the form of videos/campaigns to foreign investors? Cite 10 examples.arrow_forwardExplain the following terms and provide an example for each term: • Corruption • Fraud • Briberyarrow_forward
- In what ways could you show the attractiveness of a country in the form of videos/campaigns?arrow_forwardWith the VBS scenario in mind, debate with your own words the view that stakeholders are the primary reason why business ethics must be implemented.arrow_forwardThe unethical decisions taken by the VBS management affected the lives of many of their clients who trusted their business and services You are appointed as an ethics officer at Tyme Bank. Advise the management regarding the role of legislation in South Africa in providing the legal framework for business operations.arrow_forward
- Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning




