An investor plans to put 50000 in one of four investments, Ask an Expert

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An investor plans to put $50,000 in one of four investments. The return on each investment depends on whether next years economy is strong or weak. The following table summarizes the possible payoffs, in dollars, for the four investments. Assume that next years economy has a 40% chance of beind strong and a 60% chance of being weak.

V=Certificate of Deposit Strong=$6,000 Weak $6,000

W=Office Complex Strong=$15,000 Weak $5,000

X=Land Speculation Strong=$33,000 Weak -$17,000

Y=Technical School Strong=$5,500 Weak $10,000

a. Find the probability distribution of each random variable

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Statistics and Probability, Statistics

Category:- Statistics and Probability
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