Expected value, variance & standard deviation
Describe a grouped frequency distribution; Percentile and rank
July 9, 2019Calculating probability of sample proportion
July 9, 20194.11 An investment syndicate is trying to decide which two $200,000 apartment houses to buy. An advisor estimates the following probabilities for a five-year net returns ( in thousands of dollars):
Return: -50 0 50 100 150 200 250
Probability for house 1: .02 .03 .20 .50 .20 .03 .02
Probability for house 2: .15 .10 .10 .10 .30 .20 .05
a. Calculate the expected net return for house 1 and for house 2.
b. Calculate the respective variances and standard deviations.
The expert examines expected values, variance and standard deviation. A complete, neat and step-by-step solution is provided in the attached file.
