52

Post on 04-Nov-2015

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Transcript of 52

ConditionAmountProbabilityAmount* Prob

Boom4000000.4160000

Moderate Growth3000000.390000

Recession1000000.220000

Depression-5000000.10-50000

Mean: Sum of Amount * Probability for each of the condition

(400000*0.4)+(300000*0.3)+(100000*0.2)+(-500000*.10)

160000+90000+20000-50000=220000

Standard deviation

ConditionAmountMeanAmount - Mean(Amt-Mean)^2ProbabilityAmount* Prob

Boom400000220000180000324*10^80.4 129.6*10^8

Moderate Growth3000002200008000064*10^80.319.2*10^8

Recession100000220000-120000144*10^80.228.8*10^8

Depression-500000220000-7700005184*10^80.10518.4*10^8

Variance696*10^8

Standard Deviation

SQRT of 696.*10^8= 263818