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Mathematics, 11.09.2021 07:10 ElPaisaJuan
Solve the given problems below. Be sure to attach your complete solution.
a. The probability than an investor will make a profit of P5,000 on a certain stock is 7/8 and the probability that he or she will take a loss of P2,500 is 1/8. Determine the expectation of the investor. (3 points)
b. Ronnie tosses a pair of dice. If the sum is 2, 3, 4, or 5 appears, he will be paid P300; if the sum is 6, 7, 8, or 9 appears, he will lose P400; and if the sum is 10, 11, 12 is showing, he will win P350. Determine the expectation of the Ronnie. (5 points)
c. An investor suggests that his client select one of two types of investments in which to invest P260,000. Investment A pays a return of 9.5% and has a failure to pay rate of 6%. Investment B has 8.2% return and a failure to pay rate of 4.1%. Find the expected rate of return and decide which investment would be better. (5 points)
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