Probabilities and Relative Frequencies Are Related in That the Probability

question 47

Essay

Probabilities and relative frequencies are related in that the probability of an outcome is
the proportion of the time that the outcome occurs in the long run.Hence concepts of
joint, marginal, and conditional probability distributions stem from related concepts of
frequency distributions.
You are interested in investigating the relationship between the age of heads of
households and weekly earnings of households.The accompanying data gives the number
of occurrences grouped by age and income.You collect data from 1,744 individuals and
think of these individuals as a population that you want to describe, rather than a sample
from which you want to infer behavior of a larger population.After sorting the data, you
generate the accompanying table: The median of the income group of $800 and above is $1,050.
(a)Calculate the joint relative frequencies and the marginal relative frequencies.Interpret
one of each of these.Sketch the cumulative income distribution.

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Definitions:

Total Dividend Payment

The sum of all dividends that a company pays out to its shareholders for a specific period.

Residual Dividend Policy

A strategy where dividends are based on earnings remaining after all project capital needs are met.

Target Capital Structure

Target capital structure refers to the mix of debt, equity, and other financing sources a company aims to maintain to fund its operations and growth, while optimizing its cost of capital.

Net Income

The sum a company keeps as profit after deducting all operational costs and tax obligations from its gross revenue.