An investor estimates that there is a 75 chance that a particular ...

[WhattoUnderstand]

An investor estimates that there is a 75 chance that a particular mutual fund's price will increase to 100 per share over the next three weeks, based on past data. Interpret the 75 probability.

Question 2

The probability density function f(x) for a uniform random variable X defined over the interval 2, 10 is
 a. 0.20 c. 4
  b. 8 d. None of these choices.

[trampas]

Answer to Question 1

We interpret the 75 figure to mean that if we had an infinite number of funds with exactly the same economic and market characteristics as the one the investor will buy, 75 of them will increase in price to 100 over the next three weeks.

Answer to Question 2

D

[WhattoUnderstand]

TYSM

[kjohnson]

Excellent