Running Head: STATISTICS PROBLEMSStatistics ProblemsName of the StudentName of the UniversityAuthor Note
1STATISTICS PROBLEMSAnswer 1On investing 20,000 dollars, the possible returns and their respective probabilities aregiven by the following table: Returns (xi)Probabilities (pi)Xi*pi00.40500000.420000700000.15105001000000.055000The expected return on the investment can be given by the following formula:E(X)=∑1=1nxipi¿∑i=14xipi¿x1p1+x2p2+x3p3+x4p4¿(0∗0.4)+(50,000∗0.4)+(70,000∗0.15)+(100,000∗0.05)¿0+20,000+10,500+5000=35500.Thus, the required expected return of the investment is $35,500.
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