estion 3, we work with the standard deviation some m Opening statement: The concept of risk is not easy to measure, but most experts agree that a decision made by managers can be directly related to the extent of the dispersion of the probability distribution of profits, for example. A company that is deciding to invest in a new plant can analyze the estimated distribution of profits. One way to help make this decision would be to look at the probability distribution of profits: so it would plot the distribution of the random variable for profits on the horizontal axis, and plot the probability of such outcomes on the vertical axis. we can look at different distributions of profits and recognize that the one with greater dispersion indicates more risk, or uncertainty. Figure a below would be consistent with greater dispersion, when compared with Figure b