Internet Investments in the 1990s The following excerpt is from an article in The New York Times in July 1999: 35 While statistics are not available for web entrepreneurs who fail, the venture capitalists that finance such Internet start-up companies have a rule of thumb. For every 10 ventures that receive financing—and there are plenty that do not—2 will be stock market successes, which means spectacular profits for early investors; 3 will be sold to other concerns, which translates into more modest profits; and the rest will fail. a. What is a sample space for the scenario? b. Write down the associated probability distribution. c. What is the probability that a start-up venture that receives financing will realize profits for early investors?
Internet Investments in the 1990s The following excerpt is from an article in The New York Times in July 1999: 35 While statistics are not available for web entrepreneurs who fail, the venture capitalists that finance such Internet start-up companies have a rule of thumb. For every 10 ventures that receive financing—and there are plenty that do not—2 will be stock market successes, which means spectacular profits for early investors; 3 will be sold to other concerns, which translates into more modest profits; and the rest will fail. a. What is a sample space for the scenario? b. Write down the associated probability distribution. c. What is the probability that a start-up venture that receives financing will realize profits for early investors?
Solution Summary: The author explains that a sample space is the set of all possible outcomes for an experiment.
Internet Investments in the 1990s The following excerpt is from an article in The New York Times in July 1999:35
While statistics are not available for web entrepreneurs who fail, the venture capitalists that finance such Internet start-up companies have a rule of thumb. For every 10 ventures that receive financing—and there are plenty that do not—2 will be stock market successes, which means spectacular profits for early investors;
3 will be sold to other concerns, which translates into more modest profits; and the rest will fail.
a. What is a sample space for the scenario?
b. Write down the associated probability distribution.
c. What is the probability that a start-up venture that receives financing will realize profits for early investors?
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