STAT TECH IN BUSINESS & ECON LL\AC
18th Edition
ISBN: 9781264720545
Author: Lind
Publisher: MCG
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Chapter 20, Problem 4SR
a.
To determine
Prove that the expected payoff for Texas Electronics for the brother’s set of probabilities is $1,450.
b.
To determine
Prove that the expected payoff for Kayser Chemicals for the cousin’s set of probabilities is $1,700.
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Mike, a lumber wholesaler, is considering the purchase of a (railroad) car- load of varied dimensional lumber. He calculates that the probabilities of reselling the load for $10,000, $9000, and for $8000 are 0.22, 0.33, and 0.45 respectively. In order to ensure an expected profit of $3000, how much can Mike pay for the load
A investor estimates that, in a year’s time, a certain stock has a 30% chance to be worth $125 per share, a 45% chance to be worth $90 per share, and a 25% chance to be worth$60 per share. Determine the expectation of the price per share of the stock in a year’s time.
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STAT TECH IN BUSINESS & ECON LL\AC
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