Instruction 5 -Referring to Instruction 5

question 161

Short Answer

Instruction 5.3
There are two houses with almost identical characteristics available for investment in two different neighbourhoods with drastically different demographic composition. The anticipated gain in value when the houses are sold in 10 years has the following probability distribution:
Returns
$$\begin{array} { | c | c | c | } \hline \text { Probability } & \text { Neighbourhood A } & \text { Neighbourhood B } \\\hline 0.25 & - \$ 22,500 & \$ 30,500 \\\hline 0.40 & \$ 10,000 & \$ 25,000 \\\hline 0.35 & \$ 40,500 & \$ 10,500 \\\hline\end{array}$$
-Referring to Instruction 5.3,what is the variance of the gain in value for the house in neighbourhood A?

---

Definitions:

Two-Factor Theory

A psychological theory proposing that emotional experiences arise from a combination of physiological arousal and cognitive interpretation of that arousal.

Different Emotions

Diverse affective states that humans experience, such as happiness, sadness, anger, and fear, each characterized by unique psychological and physiological responses.

Interpretation Of Situation

The process of understanding and giving meaning to a particular circumstance or event through analysis.

Autonomic Nervous System

The part of the peripheral nervous system that controls the bodily functions not consciously directed, such as breathing, the heartbeat, and digestive processes.