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Stats and probability 11 6 an investor with two investment

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PROBABILITY AND STATISTICS CASE PROBLEM PROBLEM An investor is considering two investments, an office building, and bonds. The possible returns from each investment and their probabilities are as follows: a. Using expected value and standard deviation as a basis for comparison, discuss which of the two investments should be selected. OFFICE BUILDING The expected value of return of the investment in office building is computed as: E (x) = (50, 000) (0.30) + (60, 000) (0.20) + (80, 000) (0.10) + (10, 000)(0.30) + (0)(0.10)E (x) = 15, 000 + 12, 000 The variance is computed as follows: n 2 σ 2 ...
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