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Use the Following Two Probability Distributions for Sales of a Firm

Question 50

Multiple Choice

Use the following two probability distributions for sales of a firm to answer Questions :
 Sales  Distribution1 Probability  Distribution2 Probability 2,0000.050.053,0000.200.154,0000.500.205,0000.200.356,0000.050.25\begin{array} { c c c } \text { Sales } & \begin{array} { c } \text { Distribution1} \\\text { Probability }\end{array} & \begin{array} { c } \text { Distribution2} \\\text { Probability }\end{array} \\\hline 2,000 & 0.05 & 0.05 \\3,000 & 0.20 & 0.15 \\4,000 & 0.50 & 0.20 \\5,000 & 0.20 & 0.35 \\6,000 & 0.05 & 0.25\end{array}
-Which distribution is more risky?


A) Distribution 1 has a higher variance than Distribution 2, so Distribution 1 is more risky.
B) Distribution 2 has a higher variance than Distribution 1, so Distribution 2 is more risky.
C) Distribution 2 has a larger standard deviation than Distribution 1, so Distribution 2 is more risky.
D) both a and c
E) non of the bove

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