Find the expected value of the yearly rate of return of an investment that, for an initial cost of 100, is equally likely to yield either 120 or 100 after 2 years.
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
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Find the
expected value of the yearly rate of return of an investment that, for an initial cost of 100, is equally likely to yield either 120 or 100 after 2 years.
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