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Author Question: Suppose you make a 2,000 investment in a risky undertaking. There is a 50 chance that the payoff ... (Read 226 times)

s.tung

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on: Aug 1, 2018
Suppose you make a 2,000 investment in a risky undertaking. There is a 50 chance that the payoff from the investment will be 5,000, a 20 chance that you will just get your money back, and a 30 chance that you will receive nothing at all from your investment. If you invest 6,000 in the risky undertaking instead of 2,000 and the possible payoffs triple accordingly, what are the expected value of the net profit from the 6,000 investment?

Question 2

A sample of size 200 is taken at random from an infinite population. Given that the population proportion is 0.60, the probability that the sample proportion is between 0.58 and 0.62 is:
 a. 0.4380
  b. 0.0320
  c. 0.0200
  d. None of these choices.


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dreamfighter72

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

Expected value of the net profit from the 6,000 investment = 3(900) = 2,700

Answer to Question 2

A


s.tung

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Reply 2 on: Aug 1, 2018
Excellent

Liamb2179

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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