Risk Measurement Problems

Created by Pamela Peterson Drake

For each of the three probabilities distributions below, calculate the expected value and standard deviation

Problem 1  
Outcome ProbabilityOutcome value
Pessimistic 10%$1,000,000
Moderate 40%$4,000,000
Optimistic 50%$6,000,000
 
   
   
Problem 2  
Outcome ProbabilityOutcome value
One 10%60%
Two 50%40%
Three 30%20%
Four 10%-40%
   
   
Problem 3  
Outcome ProbabilityOutcome value
A 10%$1,000
B 20%$2,000
C 40%$3,000
D 20%$4,000
E 10%$5,000
   
Solutions