Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Statistics and Probability Expert

An investor wishes to buy a company's stock. Based on her market research, she has determined that there is a 0.6 probability of making a $20,000 profit, and a 0.4 probability of a $25,000 loss. She computes the expected value to be $2000. Assuming the value is correct, would you advise her to proceed with the investment? In general, what does the expected value tell us about an event? Can we conclude that if she repeats the same investment twice, the mean value of her net gain/loss will again be $2000? What if she repeats the experiment 10 times? Respond to at least two of your classmates' postings.

Statistics and Probability, Statistics

  • Category:- Statistics and Probability
  • Reference No.:- M9116964

Have any Question?


Related Questions in Statistics and Probability

Before-tax cost of debt and after-tax cost of debt david

Before-tax cost of debt and after-tax cost of debt David Abbot is buying a new house, and he is taking out a 30-year mortgage. David will borrow $200,000 from a bank, and to repay the loan he will make 360 monthly paymen ...

Assume that the fisherman can use between 5 and 8 lines

Assume that the fisherman can use between 5 and 8 lines. With 5 lines, the probability of a catch on each line is 0.71. With 6 this probability is 0.63, with 7 it is 0.51, and with 8 the probability is 0.43. 1) How many ...

A recent study found that 64 of workers between the ages of

A recent study found that 64?% of workers between the ages of? 20-29 cash out their retirement accounts when they lose their jobs or move to a new employer. Complete parts a through e below based on a random sample of 14 ...

Blooper industries must replace its magnoosium purification

Blooper Industries must replace its magnoosium purification system. Quick & Dirty Systems sells a relatively cheap purification system for $15 million. The system will last 5 years. Do-It-Right sells a sturdier but more ...

Question i dont understand how you would test if the data

Question: I don't understand how you would test if the data shows that there is a difference between some supplies if the testing level is at 1%? Can you show me the steps of how you would test if the data shows that the ...

Doctoral assistant ships of phd students 50 have paid

Doctoral assistant ships of Ph.D students 50% have paid assistant ships. a random sample of n=200 students is chosen.. based on this sample and using the properties of the binomial distribution, what is the approximate s ...

Assume that 8 of people have ab blood a hospital blood bank

Assume that 8% of people have AB blood. A hospital blood bank needs ABblood so the blood bank begins checking potential donors. Use this Excel file geometric probabilities (enable the macro after opening the file) or thi ...

Question 1 assume you have noted the following prices for

Question: 1. Assume you have noted the following prices for paperback books and the number of pages that each book contains. Develop a least-squares estimated regression line. i. Compute the coefficient of determination ...

Two companies make instruments for bands company as product

Two companies make instruments for bands. Company A's product has a lifespan of 5 years and a standard deviation of 15 months. Compny B's product has a mean lifespan of 5 years and a standard deviation of 3 months. Which ...

An aerospace company has submitted bids on two separate

An aerospace company has submitted bids on two separate federal government  defense contracts, AandB . The company feels that it has a 60% chance of winning contract Aand a 30% chance of winning contractB . If it wins co ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As