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75. A venture capitalist, willing to invest $1,000,000, has three investments to choose from. The first investment, a software company, has a 10% chance of returning $5,000,000 profit, a 30% chance of returning $1,000,000 profit, and a 60% chance of losing the million dollars. The second company, a hardware company, has a 20% chance ofreturning $3,000,000 profit, a 40% chance of returning $1,000,000 profit, and a 40% chance of loging the million dollars. The third company, a biotech firm, has a 1 0% chance of returning S6,000,000 profit, a 70% of no profit or loss, and a 20% chance of losing the million dollars. a. b. c. d. e. Construct a PDF for each investment. Find the expected value for each investment. Which is the safest investment? Why do you think so? Which is the riskiest investment? Why do you think so? Which investment has the highest expected return, on average? Adapeed by Protessor Ad Sachelek 4 I DISCRETE RANDOM VARIA IES

math   Statistics-And-Probability   
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te, hadea Company Ihe Selond lomptny Fom aien dala, il á gven vas shoun bao P&) 30, 00,0000.Ro 1o, 00, o0004o lo, ao,0000.0 oste third Co, Botch f amn dala, Can Const uct a): we、 | ο.lo 0.10 10, 00, 00o0.RO 60, 00, 0 (b) In this ase, toe have to ans tact the nstauc expected value grach investment bj table as belao,カ(50,00, oo) (0-10)-Uo, oo,ono) (0-3) -1o,00, 000) 0.6) 200, 00 exped value us Company icse Compan 6,00,000 hotme amping = 6,00, 4,00, 000 :Biotech 유 m = 4,00,000

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