Ray Crofford Is Evaluating Investment Alternatives for the $100,000 Which

question 15

Multiple Choice

Ray Crofford is evaluating investment alternatives for the $100,000 which he inherited from his grandfather.His investment advisor has identified four alternatives and constructed the following table which shows expected profits (in $10,000's) for various market conditions and their probabilities. The EMV of investing in Stocks is ________.

• A)$30,000
• B)$63,000
• C)$78,000
• D)$81,000
• E)$100,000

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Definitions:

Sample Statistic

A sample characteristic, such as a sample mean x, a sample standard deviation s, a sample proportion p, and so on. The value of the sample statistic is used to estimate the value of the corresponding population parameter.

Simple Random Sample

A segment of a statistical population where every individual in the segment is equally likely to be selected.

Infinite Population

A population size that is so large it is considered limitless for practical statistical purposes, often used in theoretical models.

Independently

Without being influenced or affected by other factors or variables.