TABLE 5-8 Two Different Designs on a New Line of Winter Jackets

question 88

Short Answer

TABLE 5-8
Two different designs on a new line of winter jackets for the coming winter are available for your manufacturing plants. Your profit (in thousands of dollars) will depend on the taste of the consumers when winter arrives. The probability of the three possible different tastes of the consumers and the corresponding profits are presented in the following table.

-Referring to Table 5-8, what is the variance of your profit when Design B is chosen?

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Definitions:

Monthly Compounding

Interest calculation method where interest is added to the principal sum every month.

Auto Insurance

A policy purchased by vehicle owners to mitigate costs associated with getting into an auto accident.

Nominal Interest Rate

The stated or face interest rate on a loan or financial product, not accounting for inflation or compounding.

Monthly Compounded

The process whereby interest is calculated on a principal sum and previously accumulated interest on a monthly basis.