Finding Values in the Probability Distribution Formula

Recall the Sum Rule: Σ[P(x)]=

• 1
• 0
• x
• d

What is another name for the expected value of a probability distribution?

• The mean
• The median
• The mode
• The standard deviation

This measure of a probability distribution is sometimes called the "risk".

• Mean
• Median
• Mode
• Standard Deviation

Which formula below gives the theoretical mean of a random variable "x"?

• Σ[x⋅P(x)]
• Σ(x)/n
• Σ(x)/N
• Σ[d²⋅P(x)]

Which formula below gives the theoretical variance of a random variable "x"?

• Σ[d²⋅P(x)]
• Σ[x⋅P(x)]
• Σ(x)/n
• Σ(x)/N

Find the mean of the probability distribution shown in the image.

• 11.61
• 1.30
• 1.14
• 12

Find the median of the probability distribution shown in the image.

• 11.61
• 1.30
• 1.14
• 12

Find the mode of the probability distribution shown in the image.

• 11.61
• 1.30
• 1.14
• 12

Find the standard deviation of the probability distribution shown in the image.

• 11.61
• 1.30
• 1.14
• 12

A stockbroker estimates that at the end of the year, there is a 40% chance a stock will be worth $50, a 35% chance it will be worth $60 and a 25% chance it will be worth $70.
What expected value does this broker assign to this stock's end-of-the-year price?

• $58.50
• $60.00
• $62.50
• $65.00