# Question: The following table summarizes investment outcomes and corresponding probabilities for

The following table summarizes investment outcomes and corresponding probabilities for a particular oil well:

X= the outcome in $ p(x)

-$ 40,000 (no oil)........... .25

10,000 (some oil) ........... .7

70,000 (much oil) ........... .05

a. Graph p( x); that is, graph the probability distribution of x.

b. Find the expected monetary outcome. Mark this value on your graph of part a. Then interpret this value.

c. Calculate the standard deviation of x.

X= the outcome in $ p(x)

-$ 40,000 (no oil)........... .25

10,000 (some oil) ........... .7

70,000 (much oil) ........... .05

a. Graph p( x); that is, graph the probability distribution of x.

b. Find the expected monetary outcome. Mark this value on your graph of part a. Then interpret this value.

c. Calculate the standard deviation of x.

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