Compute expected profit-variance and standard deviation
Now suppose that management believes the probability of weak demand in 2012 is 25% and the probability of strong demand is 75%. Compute the expected profit, variance, standard deviation, and coefficient of variation for each level of output.
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The probability of strong demand is 75%. Compute the expected profit, variance, standard deviation, and coefficient of variation for each level of output.
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Instructs his loan officers that they are authorized to make loans at interest rates that are equal to or greater than the bank's average cost of borrowing. How would you evaluate the bank manager's decision?
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