Business Statistics

1. Each quarter the company Endrun makes earnings predictions. At the end of the quarter we can assess whether the company exceeded, just met, or failed to meet its earnings predictions. Let’s create a random variable X to model these outcomes. Lets let X=3 denote “company exceeds”, X=2 denote “company meets” and X=1 denote “company fails to meet”. Suppose the probability of each outcome is given below: X: x Pr(x) 1 .2 2 .5 3 .3