Leland-Morgan Consulting is considering a project and its analysts have projected the following outcomes and their probabilities.
$\text { OUTCOME\quad PROBABILITY OF OUTCOMEASSUMPTIONS }$
$\begin{array}{llc}
\$ 6,000 &\quad\quad\quad\quad 25 \% & \text { pessimistic } \
\$ 8,000 &\quad\quad\quad\quad 40 \% & \text { moderately successful } \
\$ 10,000 &\quad\quad\quad\quad 35 \% & \text { optimistic }
\end{array}$
-What is the standard deviation of the outcomes?

Question

Quizplus · Accepted Answer

The standard deviation can be calculated using the formula: s = sqrt((∑(x - mean)^2)/n), where ∑(x - mean)^2 is the sum of the squared deviations from the mean, and n is the sample size. Using the given data, we can calculate the mean: (3,500 + 5,000 + 2,000 + 4,000)/4 = 3,625. Then, the sum of the squared deviations from the mean is: (3,500 - 3,625)^2 + (5,000 - 3,625)^2 + (2,000 - 3,625)^2 + (4,000 - 3,625)^2 = 9,506,250. Dividing this by the sample size of 4 and taking the square root gives us the standard deviation: sqrt(9,506,250/4) = $1,536. Therefore, the answer is C.

Leland-Morgan Consulting Is Considering a Project and Its Analysts Have OUTCOMEPROBABILITY OF OUTCOMEASSUMPTIONS \text { OUTCOME\quad PROBABILITY OF OUTCOMEASSUMPTIONS } OUTCOMEPROBABILITY OF OUTCOMEASSUMPTIONS

Leland-Morgan Consulting Is Considering a Project and Its Analysts Have $\text { OUTCOME\quad PROBABILITY OF OUTCOMEASSUMPTIONS }$