Question: Consider the random variables: X = the first year rate of return ( % ) expected from project A , and Y = the first
Consider the random variables:
X the first year rate of return expected from project A and
Y the first year rate of return expected from project B
The table below gives the joint probability function Pxy:
YXXY
Answer the following questions, rounding your answers to two decimal places where appropriate.
a Find the marginal probability function of Y In particular, find
iPYPY
iiPYPY
b Find the probability that the return from project B is percent given that the return from project A is percent.
c What is the expected rate of return from project AEX
d What is the expected rate of return from project BEY
e What is the covariance between X and Y
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