Roth Is a Computer-Consulting Firm

question 63

Multiple Choice

Roth is a computer-consulting firm.The number of new clients that they have obtained each month has ranged from 0 to 6.The number of new clients has the probability distribution that is shown below. ​ The variance is

• A) 1.45.
• B) 2.09.
• C) 3.1.
• D) 9.61.

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Definitions:

Risk-Free Asset

An investment with a guaranteed return and no risk of loss, often exemplified by government bonds of stable countries.

Risky Asset

An investment that holds some risk of losing value, as opposed to a guaranteed or risk-free asset, offering potentially higher rewards in exchange for higher risk.

Expected Return

The weighted average of the probable returns of an investment, where the weights correspond to the probability of each outcome.

Standard Deviation

A metric that quantifies the spread of a dataset around its mean, determined by taking the square root of the variance.