A stockbroker calls on potential clients from referrals. For each call, there is a 10% chance that
Question:
A stockbroker calls on potential clients from referrals. For each call, there is a 10% chance that the client will decide to invest with the firm. Fifty five percent of those interested are found not to be qualified, based on the brokerage firm’s screening criteria. The remaining are qualified. Of these, half will invest an average of $ 5,000, 25% will invest an average of $ 20,000, 15% will invest an average of $ 50,000, and the remainder will invest $ 100,000. The commission schedule is as follows:
The broker keeps half the commission. Develop a spreadsheet to calculate the broker’s commission based on the number of calls per month made. What is the expected commission based on making 600 calls?
BrokerA broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for...
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Business Analytics Methods Models and Decisions
ISBN: 978-0321997821
2nd edition
Authors: James R. Evans