Warren buffy is an enormously wealthy investor who has

Assignment Help Basic Statistics
Reference no: EM13577074

Warren Buffy is an enormously wealthy investor who has built his fortune through his legendary investing acumen. He currently has been offered three major investments and would like to choose one. The first one is a conservative investment that would perform very well in an improving economy and only suffer a small loss in a worsening economy. The second is a speculative investment that would perform extremely well in an improving economy but would do very badly in a worsening economy. The third is a countercyclical investment that would lose some money in an improving economy but would perform well in a worsening economy.Warren believes that there are three possible scenarios over the lives of these potential investments: (1) an improving economy, (2) a stable economy and (3) a worsening economy. He is pessimistic about where the economy is headed and so has assigned prior probabilities of 0.1, 0.5 and 0.4 respectively to these three scenarios. He also estimates that his profits under these respective scenarios are those given by the following table:

                                          Improving         Stable      Worsening Economy

Conservative Investment

$30 million

$5 million

-$10 million

Speculative Investment

$40 million

$10 million

-$30 million

Countercyclical investment

-$10 million

0

$15 million

Prior Probability

0.1

0.5

0.4

Reference no: EM13577074

Questions Cloud

What is the probability that a manufactured batch will have : in a chemical processing plant it is important that the yield of a certain type of batch product stay above 80. if it
Develop a decision analysis formulation of this problem if : the hit-and-miss manufacturing company produces items that have a probabilitypof being defective. these items are
The standard deviation is 500 oranges sales follow a : the production foreman for a florida fruit company estimates that the average sale of oranges is 4700 and the
In a human factor experimental project it has been : in a human factor experimental project it has been determined that the reaction time of a pilot to a visual stimulus is
Warren buffy is an enormously wealthy investor who has : warren buffy is an enormously wealthy investor who has built his fortune through his legendary investing acumen. he
In a biomedical research activity it was determined that : in a biomedical research activity it was determined that the survival time in weeks of an animal when subjected to a
We generally see a similar type of analysis performed in : when only concerned about the results at one end of the distribution curve we use a one-tail test. we generally see a
In a certain city the daily consumption of electric power : in a certain city the daily consumption of electric power in millions of kilowatt-hours is a random variable x having a
If 20 of the residents in a us city prefer a white : if 20 of the residents in a u.s. city prefer a white telephone over any other color available what is the probability

Reviews

Write a Review

Basic Statistics Questions & Answers

  Probable mean spent amount

At the end of the Halloween Festival the organizers estimated that a family of participants spent in average $50.00 with a standard deviation of $15.00. If 49 participants (49 = size of the sample) are selected randomly, what's the likeihood that ..

  Chi-square test-retirees from health care organizations

Finding and retaining good health care professionals requires an agressive recruitment effort. Since the demand for health care professionals is growing and the supply of these workers is not keeping pace, an untapped source of workers retired emp..

  Probability that selected household spends more groceries

How much money would a Western household have to spend on groceries per year in order to be at the 99th percentile?

  What happen to chance variation for good defense

The corporation there's a pretty good chance the average number of days absent would be 12 or more. that's what happened to us chance variation. Is this a good defense? Justify your answer.

  Explain does jury system seem to be fair-significance level

Use a 0.01 significance level to test the claim that the selection process is biased against Americans of Mexican ancestry. Does the jury system appear to be fair?

  Need to get quiz done online goodness of fit

Need to get quiz done online goodness of fit and test for independence need to get over 80%

  Create contingency table to show whether home pool

Develop a contingency table that shows whether a home has a pool and the township in which the house is located. Is there an association between the variables "pool" and the "township"? Use .05 level of significance.

  What is the probability that mean of the sample is more

Assuming the manufacturer's claim is correct, what is the probability the mean of the sample is 12.22 ounces or more? Using your answer form part (a), what do you think of the manufacturer's claim?

  Scatter plot and determining correlation

In forestry there appears to be a correlation between the diameter of a tree at breast height and the totol height of the tree. For the following sample of ten white spruces first construct a scatter plot then find the correlation (r) between heig..

  Grindwell inc a manufacturer of grinding tools is

grindwell inc. a manufacturer of grinding tools is conshycerned about the durability of its products which dependson

  Statistical process control

Do the above values appear to be in statistical control, justify your answer?

  Claiming using two mean z test

At the .05 significance level, is there a difference in the mean number of miles traveled per month between Cincinnati and Pittsburgh employees? Use the five-step hypothesis-testing procedure.

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