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Use the function in Problem 9 to find the indicated probabilities.
(A)
(B)
(C)
9.
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- Suppose that a decision maker's risk atitude toward monetary gains or losses x given by the utility function(x) = (50,000+x) 34/2. Suppose that a decision maker has the choice of buying a lottery ticket for $5, or not. Suppose that the lottery winning is $1,000,000, and the chance of winning is one in a thousand. Then..... O The decision maker should not buy the ticket, as the utility from not buying is 223.6, and the expected utility from buying is 223.59. The decision maker should not buy the ticket, as the utility from not buying is 223.6067, and the expected utility from buyingis 223.6065. O The decision maker should buy the ticket, as the utility from not buying 223.60, and the utility from buying is 224.4. The decision maker should buy the ticket, as the utility from not buying 223.6065, and the utility from buying is 223.6067.arrow_forward17arrow_forwardIf P(A) = 0.1, then (Ã) = 0.8 True or Falsearrow_forward
- There is a chance that a bit transmitted through a digital transmission channel is received in error. Let X equal the number of bits in error in the next four bits transmitted. The possible values of X are {0,1,2,3}. Suppose that P(X=0)=0.6, P(X=1)= 0.3, P(X=2)= 0.05, P(X=3)= 0.05 What is the CDF of X at 3? i.e., what is F(3)? a). 0.6 b). 0.9 c). 0.95 d). 1 e). none of above For the random variable defined in question 12, if we know that Var(X)=0.6475, what is the standard deviation of X? a). 0.55 b). 0.6475 c). 0.419 d). 0.8 e). none of abovearrow_forward2. Jim and Catherine are again interested in adjusting the 0-1 variables from Case 2.2 so that theycan examine different scenarios. However, theyrealize that the number of combinations of thetwo 0-1 variables they have control of, low-endversus high-end and mildly aggressive marketing versus very aggressive, is a small number,2×2 = 4. Therefore, they want you to use aRISKSIMTABLE function, with an index from 1to 4, so that a single @RISK run with 4 simulations can be made. You will have to use lookupfunctions so that the two 0-1 variables changeappropriately as the index of RISKSIMTABLEvaries from 1 to 4. As for the third 0-1 variable, whether the competition will introducea competing product, they want you to modelthis probabilistically, using a RISKBERNOULLIfunction with parameter 0.3. This simply indicates that there is a 30% chance of a competingproductarrow_forward6. 4 2 t -6 -2 -2 -4 2 4 -4 -6 Let f(t) = t.arrow_forward
- In a very large shipment of electronic devices, 5% are defective. Let X represent the number of defective devices in a random sample of 20 devices from this shipment. Which of the following expressions gives P(X>2)? (A) (0.05)²(0.95) 18 20 (B)()(0.05)* (0.95)20-* 20 (c)()(0.05)*(0.95)20-* k=3 20 (D)()(0.95)* (0.05)20-* k=3 (E) 1- 20 0.95)20-k -Σ(x) (0.05)* (0.95)² k=3arrow_forward14 is incorrect.arrow_forwardhelp me with thisarrow_forward
- . The probability that a newborn life (age 0) survives x years is given by: 110 - x xPo 0arrow_forwardA risk averse individual faces uncertainty with two outcomes: good, bad. Theindividual has income $1260 at good and $840 at bad outcome. The probability of good outcome is 5/7 (so the probability of bad outcome is 1 – 5/7 = 2/7). The individual can buy any nonnegative x units of insurance. Every unit of insurance has price $p and it pays $1 in the event of bad outcome. In this insurance market, the unit price of insurance is known to be p = 2/3. (a)Suppose the individual buys x units of insurance. Determine the individual's net income under good income, net income under bad income and the average net income. Draw these three in a diagram as functions of x. (b) For the individual: (i) compare full insurance with over insurance and (ii) compare full insurance with partial insurance. Then determine best choice of insurance for the individual.arrow_forwardApply formulas, no wordingsarrow_forwardarrow_back_iosSEE MORE QUESTIONSarrow_forward_ios
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