securities. • You are provided with the individual return distributions of the two securities: State Probability Return Security A Return Security B Portfolio Return 1 20% 50% 30% .5*50%+.5*30% 2 60% 0% 0% 0% 3 20% -50% -30% -.5*50%-.5*30% • STEP 1: Compute the portfolio return distribution. Method 1 Example State Probability Portfolio Return 1 20% 40% 2 60% 0% 3 20% -40% • STEP 2: Compute the expected
Words: 930 - Pages: 4
Decision of Uncertainty Darylisha Jones QNT/561 February 14, 2011 Paul Thomasman Decision of Uncertainty Introduction Decision: Extending automobile warranties or not? It comes a time when one has to make that decision of extending an automobile warranty when it has expired. Because auto warranties provide well needed protection, it does not come cheap be any means. Therefore, the decision to be made is the price of purchasing a warranty over the cost of repairs without a warranty
Words: 902 - Pages: 4
city representative Eddie Holguin called it a 500-year abnormality and assumed “we still have 490 more years to deal with this”( El Paso times, 2008) on the contrary to the National Weather Service, which assessed the probability of every 100 years. Considering the fact the probability of 500 year flood will not affect the current population I wanted to explore possibility of another flood happening within the next 100 years and whether it may substantiate my
Words: 861 - Pages: 4
unit, the bottles contain liters of beverage on average, with a standard deviation of liters. A sample of bottles has been taken to be measured from the beverage dispensing lot. The mean amount of beverage in these bottles was liters. Find the probability of observing a sample mean of liters or less in a sample of bottles, if the beverage dispensing unit functions properly. Carry your intermediate computations to at least four decimal places. Round your answer to at least three decimal places.
Words: 521 - Pages: 3
Question One What is a probability and how can we relate it to share returns? Question Two Define the terms expected value and standard deviation. In providing your answer, show how these terms relate to share prices. Question Three What do we mean when we say an investor is risk averse? Question Four You are given the following information about the possible returns from an investment: |Return (%) |Probability
Words: 254 - Pages: 2
Dove Valentine Mailing Campaign Course Name: Business Analytics Using Data Mining Submitted by: (Student names) Group Members (8A) Harneet Chawla Ankit Sobti Kanika Miglani Varghese Cherian Saad Khan Note: Considering our client is an FMCG, each technique mentioned below has been explained in detail ensuring thorough/easy understanding. Business Analytics Using Data Mining – Final Project Valentine Coupon Scheme Executive summary Business problem We have been hired by our client, a reputed
Words: 2632 - Pages: 11
Manufacturing, Inc., is considering whether or not to build more manufacturing plants in Wisconsin. She has developed the following pay-off table for her decision: Payoff in dollars Alternative Build large plant Build small plant Don’t build Market probabilities Favorable Market 400,000 80,000 0 0.4 Unfavorable Market -300,000 -10,000 0 0.6 (a) Use the expected monetary value approach to determine the decision that Kim should make. (b) Use the expected opportunity loss (regret) approach to determine
Words: 1391 - Pages: 6
at least 4 correct to pass II: 5 questions, each question has 4 choices, must answer at least 3 correct to pass III: 4 questions, each question has 6 choices, must answer at least 2 correct to pass Which final exam format offers the highest probability to pass? a. Final exam I b. Final exam II c. Final exam III d.
Words: 1209 - Pages: 5
Statistics is the study of the collection, organization, analysis, interpretation and presentation of data.[1][2] It deals with all aspects of data, including the planning of data collection in terms of the design of surveys and experiments.[1] The word statistics, when referring to the scientific discipline, is singular, as in "Statistics is an art."[3] This should not be confused with the word statistic, referring to a quantity (such as mean or median) calculated from a set of data,[4] whose plural
Words: 472 - Pages: 2
1) What does the term “risk” mean in the context of capital budgeting; to what extent can risk be quantified; and, when risk is quantified, is the quantification based primarily on statistical analysis of historical data or on subjective, judgmental estimates? The term “risk”, in the context of capital budgeting, means the uncertainty about the future profitability of the plan. We should understand if the taking on the project will rise both firm and stockholders’ risk. About the quantification
Words: 1749 - Pages: 7
