Assignment:
Returns on a certain business venture, to the nearest $1,000, are known to follow the probability distribution
| x |
P(x) |
| -2000 |
0.1 |
| -1000 |
0.1 |
| 0 |
0.2 |
| 1000 |
0.2 |
| 2000 |
0.3 |
| 3000 |
0.1 |
a. What is the most likely monetary outcome of the business venture?
b. Is the venture likely to be successful? Explain.
c. What is the long-term average earning of business ventures of this kind? Explain. d. What is a good measure of the risk involved in a venture of this kind? Why? Compute this measure.
Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.