Use the Following Two Probability Distributions for Sales of a Firm

question 34

Multiple Choice

Use the following two probability distributions for sales of a firm to answer Questions :
$$\begin{array} { c c c } \text { Sales } & \begin{array} { c } \text { Distribution1} \\\text { Probability }\end{array} & \begin{array} { c } \text { Distribution2} \\\text { Probability }\end{array} \\\hline 2,000 & 0.05 & 0.05 \\3,000 & 0.20 & 0.15 \\4,000 & 0.50 & 0.20 \\5,000 & 0.20 & 0.35 \\6,000 & 0.05 & 0.25\end{array}$$
-The coefficients of variation for Distributions 1 and 2 are, respectively, ___________ and ___________, so Distribution ______ has MORE risk relative to its mean.

• A) 0.22; 0.25; 2
• B) 0.22; 0.25; 1
• C) 0.31; 0.44; 1
• D) 0.31; 0.44; 2

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Definitions:

Regression

A statistical method used to model and analyze the relationships between dependent and independent variables to predict outcomes.

Regression Coefficient

A value that represents the amount by which a dependent variable changes when a related independent variable changes by one unit.

Regression

A statistical method used to determine the relationship between a dependent variable and one or more independent variables.

Variance

Average squared deviation from the mean.