Congratulations! You have just secured a position as an analyst at Voyager Enterprises. Your first assignment on the job is to evaluate Kazon, Inc. for potential investment. You believe that the company’s return over the next year depends on the world price of its main product, the transporter, a matter-energy converter. To help with your analysis, you have collected the following information: Price of Transporter ($'000 per unit) Probability Kazon Inc.’s Return (%) Price 0.1 -30 20 ≤ price 0.2 -10 40 ≤ price 0.4 25 Price ≥ 60 0.3 50 Using the information above, calculate the expected return and standard deviation of expected return for Kazon, Inc.
Congratulations! You have just secured a position as an analyst at Voyager Enterprises. Your first assignment on the job is to evaluate Kazon, Inc. for potential investment. You believe that the company’s return over the next year depends on the world price of its main product, the transporter, a matter-energy converter. To help with your analysis, you have collected the following information: Price of Transporter ($'000 per unit) Probability Kazon Inc.’s Return (%) Price 0.1 -30 20 ≤ price 0.2 -10 40 ≤ price 0.4 25 Price ≥ 60 0.3 50 Using the information above, calculate the expected return and standard deviation of expected return for Kazon, Inc.
Chapter10: Short-term Decision Making
Section: Chapter Questions
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Congratulations! You have just secured a position as an analyst at Voyager Enterprises. Your first assignment on the job is to evaluate Kazon, Inc. for potential investment.
You believe that the company’s return over the next year depends on the world price of its main product, the transporter, a matter-energy converter. To help with your analysis, you have collected the following information:
| Price of Transporter ($'000 per unit) |
Probability | Kazon Inc.’s Return (%) |
| Price | 0.1 | -30 |
| 20 ≤ price | 0.2 | -10 |
| 40 ≤ price | 0.4 | 25 |
| Price ≥ 60 | 0.3 | 50 |
Using the information above, calculate the expected return and standard deviation of expected return for Kazon, Inc.
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