Returns on a certain business venture, to the nearest $1,000, are known to follow the probability distribution
|
x
|
P(x)
|
|
-2,000
|
0.1
|
|
-1,000
|
0.1
|
|
0
|
0.2
|
|
1,000
|
0.2
|
|
2,000
|
0.3
|
|
3,000
|
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.