Consider a lottery with three possible outcomes a payoff of


Consider a lottery with three possible outcomes: a payoff of -10, a payoff of 0, and a payoff of +20. The probability of each outcome is 0.2, 0.5, and 0.3, respectively.

a) Sketch the probability distribution of this lottery.

b) Compute the expected value of the lottery.

c) Compute the variance and the standard deviation of the lottery.

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Econometrics: Consider a lottery with three possible outcomes a payoff of
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