Subjective probability problem

Assignment Help Basic Statistics
Reference no: EM13103448

Suppose that an executive of a venture capital investment firm is trying to decide how to allocate his funds among three different projects, each of which requires a $100,000 investment. The projects are such that one of the three will definitely succeed, but it is not possible for more than one to succeed.

Looking at each project as an investment, the anticipated payoff is good, but not wonderful. If a project succeeds, the payoff will be a net gain of $150,000. Of course, if the project fails, he loses all of the money invested in that project. Because he feels as though he knows nothing about whether a project will succeed or fail, he assigns a probability of .5 that each project will succeed, and decides to invest in each project.

1. According to his assessed probabilities, what is the expected profit for each project?

2. What are the possible outcomes of the three investments, and how much will he make in each case?

Reference no: EM13103448

Questions Cloud

Illustrate what is the general obligation parties must count : Illustrate what is the general obligation parties must be able to count on in the system of free enterprising?
What is the initial acceleration of a : Objects A and B are both positively charged. Both have a mass of 400g , but A has twice the charge of B. When A and B are placed 25cm apart, B experiences an electric force of 0.54N . What is the charge on A? If the objects are released, what is t..
Probability problem marginal analysis : On the fictitious game show "Marginal Analysis for Everyone" the host subjects contestants to unusual tests of mental skill. On one, a contestant may choose one of two identical envelopes labeled A and B, each of which contains an unknown amount o..
European explorers-missionaries confront native american : Did European explorers and missionaries confront Native Americans with the open mind? What type of preconceptions did they have?
Subjective probability problem : Suppose that an executive of a venture capital investment firm is trying to decide how to allocate his funds among three different projects, each of which requires a $100,000 investment.
Find the peaks elevation : When driving west toward the Rocky Mountains, you see a peak 2.8 above the horizon. Your GPS gives your current elevation as 1500 , and according to the map, you're 22.5 (horizontally) from the peak. Find the peak's elevation. Express your answer ..
Fama-french model a better model in explaining securities : Based on the company Coca Cola, conduct a linear regression to compute the stock’s beta over the past year, relative to the S&P 500 Index. Explain the steps you conducted in completing this assignment. Fama-French model a better model in explaining ..
Explain planning and team building tools : Conclude your examination by providing recommendations on how the project could have been made more successful and what analytical,
Determine the exact number of days of raining : Can you determine the exact number of days that it rained? Can you conclude anything about the number of days that it rained? Explain.

Reviews

Write a Review

Basic Statistics Questions & Answers

  Statistics-probability assignment

MATH1550H: Assignment:  Question:  A word is selected at random from the following poem of Persian poet and mathematician Omar Khayyam (1048-1131), translated by English poet Edward Fitzgerald (1808-1883). Find the expected value of the length of th..

  What is the least number

MATH1550H: Assignment:  Question:     what is the least number of applicants that should be interviewed so as to have at least 50% chance of finding one such secretary?

  Determine the value of k

MATH1550H: Assignment:  Question:     Experience shows that X, the number of customers entering a post office during any period of time t, is a random variable the probability mass function of which is of the form

  What is the probability

MATH1550H: Assignment:Questions: (Genetics) What is the probability that at most two of the offspring are aa?

  Binomial distributions

MATH1550H: Assignment:  Questions:  Let’s assume the department of Mathematics of Trent University has 11 faculty members. For i = 0; 1; 2; 3; find pi, the probability that i of them were born on Canada Day using the binomial distributions.

  Caselet on mcdonald’s vs. burger king - waiting time

Caselet on McDonald’s vs. Burger King - Waiting time

  Generate descriptive statistics

Generate descriptive statistics. Create a stem-and-leaf plot of the data and box plot of the data.

  Sampling variability and standard error

Problems on Sampling Variability and Standard Error and Confidence Intervals

  Estimate the population mean

Estimate the population mean

  Conduct a marketing experiment

Conduct a marketing experiment in which students are to taste one of two different brands of soft drink

  Find out the probability

Find out the probability

  Linear programming models

LINEAR PROGRAMMING MODELS

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd