What is the expected pay off and variance of the pay off

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1. Five of ten people earn $0, four earn $100, and one loses $100. What is the expected pay off and variance of the pay off?

2. There is a 50 percent chance of making $0, a 40 percent chance of making $100, and a 10 percent chance of losing $100. Calculate the expected value and variance of the payoff. How does your estimate compare to the previous problem?

Reference no: EM131000039

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