Probability is the likelihood or chance of an event occurring. Discuss its significance in real life. Develop a hypothesis about any real life occurring phenomena and calculate probability by using hypothetical values.
Q: You are modeling a qualitative variable that takes on two classes (classes 1 and 2). In trying to…
A: The answer is given below
Q: An investor considers investing $17,000 in the stock market. He believes that the probability is…
A: Probability tells us the approximate chance of things taking place. It basically briefs us about the…
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Q: Show your work. An MBA applies for a job in two firms X and Y. The probability of his being selected…
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Q: Information for questions 21 and 22: A worker in a firm can choose one of two effort levels, e € {1,…
A: Worker can be of two types based on his efforts : e = 1 , e = 2 Utility of worker : U = 2w - e2…
Q: Half of a set of the parts are manufactured by machine A and half by machine B. Five percent of all…
A: Solution - Given - Half set of parts manufactured by machine A and half by machine B. Percentage of…
Q: ustomers arrive at an ATM at the rate of 3 per minute. The arrival rate follows a Poisson…
A:
Q: Decisions Involving Uncertainty - End of Chapter Problem You're a project manager overseeing five…
A: Probability of one team completing the project before time = 0.75 No of teams = 5 Probability of…
Q: An investment counselor calls with a hot stock tip. He believes that if the economy remains strong,…
A: Expected value is calculated by multiplying each of the possible outcomes by the likelihood each…
Q: In a final round of a MegaMillion TV show, a contestant has won $1 million and has a chance of…
A: Ans in step 2
Q: An individual has the utility function U(I) = I^(1/2), where I is their net income. (Note that I to…
A: The projected net pay-off of actuarially fair insurance is $0. An insurance contract is actuarially…
Q: Consider a lottery with three possible outcomes: $100 will be received with probability .1, $50 with…
A: 1) Expected value of lottery is given as E(U)= p1x1+p2x2+p3x3 Where pi is the probability of that…
Q: What do we call the probability of a Type I error?
A: While performing a test significance hypothesis, an individual should take care of the results…
Q: Both jobs provide base salary and commissions. Base salary is garunteed But the probability of…
A: This will be explained below: Given Job1: base salary is 1k but the commission is 3k. Job2: base…
Q: Using the normal table or software, find the value of z that makes the following probabilities true.…
A: * SOLUTION :- * The OPTION E is correct answer.
Q: Question 2 A potential criminal enjoys a gain of g > 0 from committing an illegal act. If the…
A: Qe are going to use expectation principle and bayesian probabilty to answer this question.
Q: Suppose that an individual is just willing to accept a gamble to win or lose $1000 if the…
A: Expected gain or loss can be calculated from the following formula = Probability of winning*amount…
Q: A new product is built and ready to launch. If successful, it will lead to a profit of $50,000. If…
A: The sum of probability of being successful and the probability of being unsuccessful will be equal…
Q: Consider Bob's decision problem: Sunny Cloudy Rainy Beach 2 3 2 Park 3 3 2 Mall -1 1 x Suppose…
A: An expected utility maximiser may be a theoretical agent that examines its actions, calculates the…
Q: opening 2018 World Cup odds against being the winning team specified by espn.com were 9/2 for…
A: It is known that the formula to compute the odds for the winning team is: Odds against =Number of…
Q: The probability that the next President will be a Democrat is 0.5, and the probability that the next…
A: Given that, The probability that the next President will be a Democrat is 0.5, and the probability…
Q: 2. According to the classical definition of probability a. All the events are equally likely.…
A: Equal odds of something happening is there in classical theory of probability.
Q: EXPLAIN 2 ways of how should the decision maker incorporate forecast error?
A: A forecast error is simply the difference between the actual and forecasted value of any time series…
Q: ime remaining: 01 :51 :45 Economics A dealer decides to sell an antique automobile by means of an…
A: Since, the reservation price of the dealer is $900, therefore, he will only accept bids above the…
Q: ‘Lottery A’ refers to a lottery ticket that pays $2,000 with a probability of 0.3, $8,000 with a…
A: Expected gains = ∑ (probability * gains)‘Lottery A’ refers to a lottery ticket that pays $2,000 with…
Q: Describe the relationship between Expected Value, Expected Utility and Certain Equivalent (at least…
A: The expected value is the anticipated value of anything that a person expects. In probability…
Q: Insurance: An insurance company sells a l-year term life insurance policy to an 84-year-old man. The…
A: Given Insurance premium =$1600 The probability that the 84-year old man will be alive 1 year later…
Q: Prospect X ($14, 0.5; $18, 0.5) Prospect Z ($A, 0.5; $24, 0.5) You know that Prospect Z is a mean…
A: Given that Prospect Z is a mean preserving spread of Prospect X. Thus the expected values of Z and X…
Q: The probabilities of X, Y and Z becoming managers are 4/9, 2/9 and 1/3 respectively. The…
A:
Q: An individual has 40,000 in income per year. The person will get sick with probability 0.1. If he…
A: Given, Income if person does not get sick = M = 40,000 Utility (M) = 200 Probability of getting sick…
Q: A biometric security device using fingerprints erroneously refuses to admit 3 in 1,500 authorized…
A:
Q: A law school is trying to gain a better understanding of the determinants of bar passage rates.…
A: P(X) - The probability with which a randomly selected graduate has received an A in Economic…
Q: A construction company needs to move lumber onto the roof of a building. If the lumber falls and…
A: P(A) denotes the probability of accident.Damage caused by accident = $1,200,000The amount paid for…
Q: Consider a city where everyone commutes to the city center, and the commuting cost per mile per…
A: Commuting cost per mile per month= $50 Each household has 1500 sq feet dwelling The worth of…
Q: Two coins are tossed 500 times, and we get: i) Two heads: 105 times ii) One head: 275 times iii)…
A: When we toss a coin the outcome would be either head or tail.
Q: Setup from Question 1) An expected utility maximiser owns a car worth £60 000 and has a bank account…
A: Answer 1 The person would be killing to pay the £ 20000 the reason for the same is that he has the…
Q: Mete is Esra's boyfriend. Esra is expecting a marriage proposal from Mete. Today is Sunday. Mete…
A: Mete has given the following hints to Esra : (1) The day and time of proposal - he is going to…
Q: Describe and use techniques that apply to decision making under uncertainty.
A: Methods of decision making under uncertainty: Maximin criterion: It is also known as a pessimistic…
Q: You need to hire some new employees to staff your start-up venture. You know that potential…
A: The expected value can be calculated using the following equation.
Q: What is the probability of getting a king if a card is drawn from a pack of 52 cards?
A: Given: Number of cards in a deck = 52 Number of Kings in a deck of a card =4
Q: In the final round of a TV game show, contestants have a chance to increase their current winnings…
A: There is a half-half probability of a contestant guessing the answer right and increasing their…
Q: In the final round of a TV game show, contestants have a chance to increase their current winnings…
A: Expected value is the sumproduct of probabilities and the payoff values, positive or negative.…
Q: Airline passengers arrive randomly and independently at the passenger-screening facility at a major…
A: Hey champ, Welcome to this platform. Here you will get the answer with better quality in minimum…
Q: An individual has a utility function U(W) = VW , where W is the level of wealth. They have been…
A: Certainty equivalent is a certain amount of money that make use indifferent between getting money…
Q: Mr. Smith can cause an accident, which entails a monetary loss of $1000 to Ms. Adams. The likelihood…
A: Answer a) If Mr. Smith and Ms. Adams choose a high precautionExpected loss = 0.1*1000 + 200…
Q: You work at a mechanic shop. 40% of cars that come in have a flat tire. If there are 50 cars in…
A: Given, Probability- 40% No of cars- 50 To find- probability of 30 cars to have flat tires
Probability is the likelihood or chance of an event occurring. Discuss its significance in real life. Develop a hypothesis about any real life occurring phenomena and calculate probability by using hypothetical values.
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- Decisions Involving Uncertainty - End of Chapter Problem You're a project manager overseeing five teams that are developing a new app. Each team must complete their work by July 1 in order to release the app by the end of the year. Based on your work managing the project, you know that each team has about a 75% chance of meeting the deadline. a. The probability that your firm will complete the project by the end of the year is b. Suppose that before you calculate the probability of completing the project, you walk into a weekly status meeting with the CEO. When she asks you for your "gut feeling" about the probability of finishing the project by the end of the year, you respond with an answer that exhibits the anchoring bias. Your response will likely be, "About 70%." "About 90%." "About 25%."A new product is built and ready to launch. If successful, it will lead to a profit of $50,000. If it is unsuccessful, it will lead to a loss of $30,000. What probability of success would make the company indifferent about launching the product? Enter as a decimal (not a percentage).Consider two local banks. Bank A has 100 loans outstanding, each for $0.9 million, that it expects will be repaid today. Each loan has a 7% probability of default, in which case the bank is not repaid anything. The chance of default is independent across all the loans. Bank B has only one loan of $90 million outstanding, which it also expects will be repaid today. It also has a 7% probability of not being repaid. Calculate the following: a. The expected overall payoff of each bank. b. The standard deviation of the overall payoff of each bank.
- In the final round of a TV game show, contestants have a chance to increase their current winnings of $1 million dollars to $2 million dollars. If they are wrong, their prize is decreased to $500,000. The contestant thinks his guess will be right 50% of the time. Should he play? What is the lowest probability of a correct guess that would make playing profitable?Question in economics statistics: The probability that a management trainee will remain with a company is 0-60. The probability that an employee earns more than Dollar 10,000 per month is 0.50. The probability that an employee is a management trainee who remained with the company or who earns more than Dollar 10,000 per month is 0.70. What is the probability that an employee earns more than dollar 10,000 per month, given that he is a management trainee who stayed with the company?Describe and use techniques that apply to decision making under uncertainty.
- K An investment counselor calls with a hot stock tip. He believes that if the economy remains strong, the investment will result in a profit of $30,000. If the economy grows at a moderate pace, the investment will result in a profit of $10,000. However, if the economy goes into recession, the investment will result in a loss of $30,000. You contact an economist who believes there is a 30% probability the economy will remain strong, a 60% probability the economy will grow at a moderate pace, and a 10% probability the economy will slip into recession What is the expected profit from this investment? The expected profit is $ (Type an integer or a decimal.)Gavin Jones’s friend is planning to invest $1 million in a rockconcert to be held 1 year from now. The friend figures that he will obtain $2.8 million revenue from his $1 million investment—unless it rains. If it rains, he will lose his entire investment. There is a 50% chance that it will rain the day of the concert. Gavin suggests that he buy rain insurance. He can buy one unit of insurance for $0.50, and this unit pays $1 if it rains and nothing if it does not. He may purchase as many units as he wishes, up to $2.8 million.(a) What is the expected rate of return on his investment if he buys u units of insurance? (The cost of insurance is in addition to his $1 million investment.)(b) What number of units will minimize the variance of his return? What is this minimum value? And what is the corresponding expected rate of them? [Hint: Before calculating a general expression for variance, think about a simple answer.]In a game, there are three values 1, 000, 2.500 and 5,000 and the cost of the game is 1, 500 . If each outcome has an equal probability of occurring, then what is the expected value of playing the game?
- Suppose that a car - rental agency offers insurance for a week that costs $125. A minor fender bender will cost 34000 whereas a major accident might cost $16 comma 000 in repairs. Without the insurance, you would be personally liable for any damages. There are two decision alternatives: take the insurance, or do not take the insurance. You researched insurance industry statistics and found out that the probability of a major accident is 0.04% and that the probability of a fender bender is 0.18%. The expected payoff if you buy the insurance is $125.00. The expected payoff if you do not buy the insurance is $12.52. Develop a utility function for the payoffs associated with this decision for a risk-averse person. Determine the decision that would result using the utilities instead of the payoffs. Based on the expected payoffs, the best decision is to not purchase the insurance. Are these two decisions consistent?A real estate developer must decide on a plan for developing a certain piece of property. After careful consideration, the developer has two acceptable alternatives: residential proposal or commercial proposal. The main factor or state of nature that will influence the profitability of the development is whether or not a shopping center is built close by and the size of the shopping center. There is a 20% chance of no center being built, a 50% chance of a medium shopping center built, and a 30% chance of a large shopping center. If the developer selects the residential proposal and no center is built, he has a further set of options: do nothing $400,000 payoff; build a small shopping center himself $700,000 payoff; or put in a park resulting in $800,000 payoff. Should a medium shopping center be built nearby, his payoff for residential would be $1,600,000 and large shopping center results in a $1,200,000 payoff. If the developer selects the commercial proposal and no center is…Imagine a market for used computers. There are two types of computers: good and bad. Also imagine that there are 50% of each on the market. Buyers can imagine paying 5,000 for a good computer and 1,000 for a bad computer Sellers want at least 4000 for a good computer and 1500 for a bad computer Assume that the buyer thinks that there is a 50% probability that the computer is of poor quality. What is the expected value and price of a computer that the buyer most wants to pay?