Refer to the Following Table Showing the Probability Distribution of Payoffs

question 54

Multiple Choice

Refer to the following table showing the probability distribution of payoffs from an activity to answer the question below: $$\begin{array} { c c c } \text { Units } & \text { Payoff } & \text { Prabability } \\\hline 1 & \$ 30 & 10 \% \\\mathbf { 2 } & 40 & 25 \% \\3 & 60 & 30 \% \\4 & 50 & 20 \% \\5 & 10 & 15 \% \\\hline\end{array}$$ What is the coefficient of variation for this distribution?

• A)0.39
• B)2.34
• C)0.86
• D)1.02
• E)0.10

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Definitions:

Business Failure

When a business closes with a financial loss to a creditor.

Innovation of New Ideas

The process of creating and implementing new concepts, products, or solutions.

Creative Destruction

The replacement of existing products, processes, ideas, and businesses with new and better ones.

Economies of Scale

The economic benefits that companies gain from their size of operation, whereby the expense per output unit typically diminishes as the scale expands.