71 The PearsonTukey Method requires assessing the 005 05 and

71. The Pearson-Tukey Method requires assessing the 0.05, 0.5, and the 0.95 fractiles from the cumulative distribution function and multiplying the outcomes by which of the following probabilities in order to get the expected value?

A. 0.2, 0.2, 0.2

B. 0.33, 0.33, 0.33

C. 0.185, 0.63, 0.185

D. none of the above

74. Tim has not been doing well in finance class. His professor tells him to write up a case analysis for her in order to pass the class. He can still pass the class without the write-up, just like he still can fail with it, since the final exam is coming up. Which of these decisions would have a vertical line at the end of their branch?

A. Do nothing.

B. Pass the final exam.

C. Write the case analysis.

D. none of the above.

Solution

71.

Let x_0.05 , x_0.5 , x_0.95 are the respective fractiles of the cumulative distribution function. Then by Pearson-Tukey approximation of the expected value will be :

Expected Value = 0.185 * x_0.05 + 0.63 * x_0.5 + 0.185 * x_0.95

So the probablities are 0.185, 0.63, 0.185. The answer is (C)

74.

Tim must pass the final exam to see an end to it. So the decision of passing the final exam must have a vertical line at the end of their branch. So the answer is (B)