MATLAB: An Introduction with Applications
6th Edition
ISBN: 9781119256830
Author: Amos Gilat
Publisher: John Wiley & Sons Inc
expand_more
expand_more
format_list_bulleted
Related questions
Question
A venture capitalist, willing to invest $1,000,000 has three investments to choose from. The first investment, a software company, has a 10% chance of returning $5,000,000profit, a 30% chance of returning $1,000,000 profit, and a 60% chance of losing the million dollars. The second company, a hardware company, has a 20%chance of returning $3,000,000 profit, a 40% chance of returning $1,000,000profit, and a 40%chance of losing the million dollars. The third company, a biotech firm, has a 10% chance of returning $6,000,000 profit, a 70%of no profit or loss, and a 20% chance of losing the million dollars.
(a) Construct a
Enter the exact answers as fractions or decimals.
| x | P(x) |
|---|---|
| −1,000,000 | |
| 1,000,000 | |
| 5,000,000 |
software company^
| x | P(x) |
|---|---|
| −1,000,000 | |
| 1,000,000 | |
| 3,000,000 |
hardware company^
| x | P(x) |
|---|---|
| −1,000,000 | |
| 0 | |
| 6,000,000 |
Biotech firm
(b) Find the
Software company: $
Hardware company: $
Biotech firm: $
(c) Which is the safest investment (which investment has the lowest probability of loss)?
|
Software company |
||
|
Hardware company |
||
|
Biotech firm |
(d) Which is the riskiest investment (which investment has the highest probability of loss)?
|
Software company |
||
|
Hardware company |
||
|
Biotech firm |
(e) Which investment has the highest expected return, on average?
|
Software company |
||
|
Hardware company |
||
|
Biotech firm |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps with 1 images
Knowledge Booster
Similar questions
- Complete the following probability distribution table: Probability Distribution Table P(X) 0.3 16 24 0.2 34 0.3 Submit Questionarrow_forwardElaine Benes is considering three possible ways to invest the $200,000 she has just inherited. Some of Elaine’s friends are considering financing a combined laundromat, video-game arcade, and pizzeria, where the young singles in the area can meet and play while doing their laundry. This venture is highly risky and could result in either a major loss or a substantial gain within a year. Elaine estimates that the chances of losing all the money (i.e. loss of $200,000) are 47%, while the chances of making a $200,000 profit are 53%. Elaine can invest in some new apartments that are being built in town. Within 1 year, this fairly conservative project will produce a profit of at least $10,000, but it might yield $20,000 or even $30,000. Elaine estimates the probabilities of these yields at 20%, 50%, and 30% respectively. Elaine can invest in some private securities that have a current yield of 5%. Construct (draw) a decision tree for Elaine to determine which investment will maximize her…arrow_forwardMcJester's Burger Hut plans to expand by opening several new restaurants. The chain operates two types of restaurants: drive-through and full-service. A drive-through restaurant costs $111,000 to construct, requires 7 employees, and has an expected annual revenue of $205,000. A full-service restaurant costs $184,000 to construct, requires 17 employees, and has an expected annual revenue of $565,000. McJester's has $3,250,000 in capital available for expansion. Labor contracts require that they higher no more than 325 employees. Licensing restrictions require that they open no more than 25 new restaurants. Let x be the number of drive-through restaurants and let y be the number of full-service restaurants in this expansion. Let R be the expected annual revenue in dollars resulting from the expansion. McJester's wants to maximize the expected revenue. Set up the linear programming problem. Answer the following questions about this linear programming problem. The question is attached…arrow_forward
- A venture capitalist, willing to invest $1,000,000, has three investments to choose from. The first investment, a software company, has a 13% chance of returning $6,000,000 profit, a 20% chance of returning $3,000,000 profit, and a 67% chance of losing the million dollars. The second company, a hardware company, has a 14% chance of returning $6,000,000 profit, a 30% chance of returning $1,500,000 profit, and a 56% chance of losing the million dollars. The third company, a biotech firm, has a 10% chance of returning $7,000,000 profit, a 41% of no profit or loss, and a 49% chance of losing the million dollars.Order the expected values from smallest to largest. first, third, second second, third, first third, second, first first, second, third second, first, third third, first, secondarrow_forwardYour school's basketball team is organizing a bus trip to a Toronto Raptors game at the Air Canada Centre. The cost to rent the bus, which can carry up to 52 people, is $380 and the cost of tickets for a group of 20 or more is $29.50 per person. In addition, the team wants to make a $250 profit from this event to help defray the costs of a future tournament. However, the school administration requires that the cost of the trip per person not exceed $45. Is this possible? If so, what is the minimum number of people that must participate in the activity?arrow_forwardMcJester's Burger Hut plans to expand by opening several new restaurants. The chain operates two types of restaurants: drive-through and full-service. A drive-through restaurant costs $111,000 to construct, requires 7 employees, and has an expected annual revenue of $205,000. A full-service restaurant costs $184,000 to construct, requires 17 employees, and has an expected annual revenue of $565,000. McJester's has $3,250,000 in capital available for expansion. Labor contracts require that they higher no more than 325 employees. Licensing restrictions require that they open no more than 25 new restaurants. Let x be the number of drive-through restaurants and let y be the number of full-service restaurants in this expansion. Let R be the expected annual revenue in dollars resulting from the expansion. McJester's wants to maximize the expected revenue. Set up the linear programming problem. Answer the following questions about this linear programming problem. The question is attached…arrow_forward
- You are the marketing director for a company that manufactures bodybuilding supplements, and you are planning to run ads in Sports Illustrated and GQ Magazine. On the basis of readership data, you estimate that each ad in Sports Illustrated will be read by 600,000 people in your target group, while each ad in GQ will be read by 150,000. You would like your ads to be read by at least 12 million people in the target group, and you plan to place at least 6 ads in Sports Illustrated and at least 8 ads in GQ during the next year. Sports Illustrated quotes you $2000 per ad, while GQ quotes you $1000 per ad. How many ads should be placed in each magazine to satisfy your requirements at a minimum cost? Sports Illustrated ads GQ Magazine adsarrow_forwardA car wash has three different types of washes: basic, classic, and ultimate. Based on records, 45% of customers get the basic wash, 35% get the classic wash, and 20% get the ultimate wash. Some customers also vacuum out their cars after the wash. The car wash records show that 10% of customers who get the basic wash, 25% of customers who get the classic wash, and 60% of customers who get the ultimate wash also vacuum their cars. The probabilities are displayed in the tree diagram.What is the probability that a randomly selected customer purchases the basic or classic car wash if they vacuum their car?A) 0.13B) 0.48C) 0.52D) 0.80arrow_forwardA venture capitalist, willing to invest $1,000,000, has three investments to choose from. The first investment, a software company, has a 14% chance of returning $8,000,000 profit, a 19% chance of returning $1,500,000 profit, and a 67% chance of losing the million dollars. The second company, a hardware company, has a 15% chance of returning $9,000,000 profit, a 37% chance of returning $3,500,000 profit, and a 48% chance of losing the million dollars. The third company, a biotech firm, has a 15% chance of returning $6,000,000 profit, a 28% of no profit or loss, and a 57% chance of losing the million dollars.Order the expected values from smallest to largest. first, third, second third, first, second third, second, first second, first, third first, second, third second, third, firstarrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- MATLAB: An Introduction with ApplicationsStatisticsISBN:9781119256830Author:Amos GilatPublisher:John Wiley & Sons Inc
Probability and Statistics for Engineering and th...StatisticsISBN:9781305251809Author:Jay L. DevorePublisher:Cengage Learning
Statistics for The Behavioral Sciences (MindTap C...StatisticsISBN:9781305504912Author:Frederick J Gravetter, Larry B. WallnauPublisher:Cengage Learning 
Elementary Statistics: Picturing the World (7th E...StatisticsISBN:9780134683416Author:Ron Larson, Betsy FarberPublisher:PEARSON
The Basic Practice of StatisticsStatisticsISBN:9781319042578Author:David S. Moore, William I. Notz, Michael A. FlignerPublisher:W. H. Freeman
Introduction to the Practice of StatisticsStatisticsISBN:9781319013387Author:David S. Moore, George P. McCabe, Bruce A. CraigPublisher:W. H. Freeman
MATLAB: An Introduction with Applications
Statistics
ISBN:9781119256830
Author:Amos Gilat
Publisher:John Wiley & Sons Inc
Probability and Statistics for Engineering and th...
Statistics
ISBN:9781305251809
Author:Jay L. Devore
Publisher:Cengage Learning
Statistics for The Behavioral Sciences (MindTap C...
Statistics
ISBN:9781305504912
Author:Frederick J Gravetter, Larry B. Wallnau
Publisher:Cengage Learning
Elementary Statistics: Picturing the World (7th E...
Statistics
ISBN:9780134683416
Author:Ron Larson, Betsy Farber
Publisher:PEARSON
The Basic Practice of Statistics
Statistics
ISBN:9781319042578
Author:David S. Moore, William I. Notz, Michael A. Fligner
Publisher:W. H. Freeman
Introduction to the Practice of Statistics
Statistics
ISBN:9781319013387
Author:David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:W. H. Freeman