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Author Question: If a payout is certain to occur, then the variance of that payout equals A) zero. B) one. C) ... (Read 46 times)

Engineer

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on: Jul 1, 2018
If a payout is certain to occur, then the variance of that payout equals
 
  A) zero.
  B) one.
  C) the expected value.
  D) the expected value squared.

Question 2

Sarah buys little stuffed animals for 5 each. They come in different varieties. If the producer stops making (retires) a certain variety, a stuffed animal of that variety will be worth 100; otherwise it is worth 0. There is 50 chance that any variety will be retired. What is the value to Sarah of knowing ahead of time whether a variety will be retired?
 
  A) 50
  B) 5
  C) 2.50
  D) 0
Microeconomics ¦ Perloff ¦ 8th Edition
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mistyjohnson

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Reply #1 on: Jul 1, 2018
Answer to Question 1

A

Answer to Question 2

C


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Engineer

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Reply #2 on: Jul 1, 2018
Correct answers!


mistyjohnson

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Reply #3 on: Jul 1, 2018
Great! Please up vote :D


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