If It Costs $200,000 to Drill Each Well and a Successful

question 5

Short Answer

If it costs $200,000 to drill each well and a successful well will produce $1,000,000 worth of oil over its lifetime, what is the expected net value of this three-well program if all three wells are successful?

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Definitions:

Spearman Rank Correlation

A statistic used to measure the strength and direction of association between two ranked variables.

Pearson Correlation

A measure of the linear correlation between two variables X and Y, giving a value between -1 and 1.

Positive Correlation

The relationship between two variables where both variables move in the same direction.

IQ Score

A measure of a person's intellectual abilities compared to the average population, typically scored on a scale where 100 is the average.