A simple random sample of 6 recent graduates revealed the following information about their weekly incomes.
Graduates Weekly Income
a. What is the expected value of the average weekly income of all the recent graduates?
b. What is the expected value of the standard deviation for the population?
This solution is comprised of detailed step-by-step calculation and analysis of the given problem and provides students with a clear perspective of the underlying concept.
Two business projects: Coefficient, standard deviation, and expected value
A firm is considering two business projects. Project A will return a loss of $45 if conditions are poor, a profit of $35 if conditions are good, and a profit of $155 if conditions are excellent. Project B will return a loss of $100 if conditions are poor, a profit of $60 if conditions are good, and a profit of $300 if conditions are excellent. The probability distribution of conditions follows:
Conditions : Poor Good Excellent
Probabilities: 40% 50% 10%
(i) Calculate the expected value of each project and identify the preferred project according to this criterion.
(ii) Calculate the standard deviation of each project and identify the project that has the higher level of risk.
(iii) Calculate the coefficient of variation for each project and identify the preferred project according to this criterion.