00:01
You are considering investing in one of two projects.
00:03
Now, full disclosure, these may not be, this may not be the table that you have.
00:14
This was the table i could find for this problem, but it's entirely possible that your table has different values.
00:28
And if it does, you're going to want to switch out your values.
00:34
You're going to want to switch out your values, i guess, is what i want to say.
00:37
So this is the table we have.
00:40
So negative 20%, or the table i had, 0%, 10%, 15%, 20%, and 40%.
00:49
And then project b had negative 35%, negative 10%, 15%, 25%, 15%, 25%, 40%, and 50 % for its values.
01:01
And we're going to compute the mean and the standard deviation.
01:04
And what i'm going to do is i'm going to rewrite this these tables.
01:10
So i'm going to rewrite the table and put my project values into the left -hand column and my probability into the right, because that's typically how we look at them.
01:28
Oops, i don't know why i put a negative there.
01:30
Let's erase that negative.
01:32
So we have negative .2, we have 0 .10, we have 0 .15, 0 .20, and 0 .40, and the corresponding probabilities.
01:45
So to calculate the mean, i'm going to take, so if we think of this as x and then this is the probability of x, i'm going to take x times the probability of x.
01:54
So that's negative.
01:57
0 .0 .025, 0 .045, 0 .02 and 0 .02 again.
02:08
And the mean is going to be the sum of those.
02:10
So when i add them together, i get 0 .09.
02:12
So for part a, i'm going to put 9 percent in the first.
02:16
First box.
02:18
Now for project b, i'm going to go ahead and, just like i did for project a, i'm going to rewrite my table.
02:31
So for project b, i have negative .35, negative.
02:35
Negative 0 .15, or negative, excuse me, positive .15, positive 0 .25, positive point four, and positive point five, and the probabilities...