Question

请教一道管理经济学的题目,我们的老师是老外,留了道英语题目,不知道怎么做,请大家帮帮忙,谢谢了.

In making a business decision, the company estimates a 10% probability that the cash inflow from a project is $ 2,000, a 40% probability that the cash inflow is $5,000 and a 50% probability that the cash inflow is $6,000 .
i ) Calculate the company’s expected value of cash inflow .
ii ) Calculate the standard deviation
iii ) If a second project has the same expected value of cash inflow , but a smaller standard deviation , which project would you recommend ?

Answer 1

1 expected value=10%*2000+40%*5000+50%6000=5200
2 variance=10%*(1000-5200)^2+40%*(5000-5200)^2+50%*(6000-5200)^2=2100000（^2是平方的意思）
stardard deviation=2100000开平方(数学符号打不出来)=1449
3 if the second project has the same expectation but smaller standard deviation then you should choose the second the project, the reason is that the expected profit of the second profect is the same as the first one but contains smaller risk