5. A Bernoulli random variable, representing whether or not the stock market goes up or down tomorrow (assume that the market cannot be unchanged), has an "up" probability of 0.6 and a "down" probability of 0.4. What is the standard deviation of this random variable?
a. 0.4
b. 0.6
c. 0.49
d. 0.24
6. Using the same probability as described in Question 5, and assuming that moves in the market are independent from day to day, then what is the probability that the market goes up on exactly 2 of the next 4 days?
a. 0.5000
b. 0.7776
c. 0.3456
d. 0.0576
Answers: 1
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