Instruction 5-5
There Are Two Houses with Almost Identical Characteristics

question 27

Short Answer

Instruction 5-5
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
$$\begin{array} { | c | c | c | } \hline \text { Probability } & \text { Neighbourhood A } & \text { Neighbourhood B } \\\hline .25 & - \$ 22,500 & \$ 30,500 \\\hline .40 & \$ 10,000 & \$ 25,000 \\\hline .35 & \$ 40,500 & \$ 10,500 \\\hline\end{array}$$
-Referring to Instruction 5-5,what is the variance of the gain in value for the house in neighbourhood B?

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Definitions:

E-tailing

Electronic retailing or online shopping, which is the sale of goods and services through the internet.

E-procurement

Electronic procurement refers to the process of purchasing goods or services for a business using online platforms or technology.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount to immediately generate cash.

Authenticating

The process of verifying the identity of a user or device, often as a part of securing access to systems and information.