The Amount of Money That Jon Can Save After Working

question 7

Multiple Choice

The amount of money that Jon can save after working for a summer is a random variable S with a mean of $1,500 and a standard deviation of $100.After saving this money Jon plans to go on a trip to India.He will change his money into Rupees at an exchange rate of 43 Rupees to one Dollar.This money he will bring to India.When he arrives in India he will buy a used motorbike.The price in India of a motorbike of the type he wants is a random variable B with a mean of 17,500 Rupees and a standard deviation of 600 Rupees.The amount of money Jon will have left (in Rupees) after changing his savings into Rupees and buying a motorbike in India is a random variable P which can be expressed in terms of S and B as P = 43S - B.Find the mean and standard deviation of P in Rupees.Assume that Jon's savings and the price of the bike are independent.

• A)μ = 82,000 Rupees,σ = 4,900 Rupees
• B)μ = 47,000 Rupees,σ = 3,700 Rupees
• C)μ = 47,000 Rupees,σ = 4,342 Rupees
• D)μ = 47,000 Rupees,σ = 4,258 Rupees
• E)μ = 82,000 Rupees,σ = 889 Rupees

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Definitions:

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The ability of one party in a negotiation to influence the terms and conditions due to its resources, alternatives, or strategic position.