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AP Statistics Practice- Probability Distributions and Expected Value 1. Name:____________________________________ Date:_____________________________________ Does the following refer to a probability distribution? If so, determine the mean and standard deviation. Which x-values, if any, would be considered unusual? Use the 2 process. 2 3 4 5 6 7 8 9 10 11 12 x P(x) 1/36 2/36 3/36 4/36 5/36 6/36 5/36 4/36 3/36 2/36 1/36 2. Here is a problem taken from the 1988 Chartered Financial Analysts examination, which people working in finance need to pass to make lots of money. Assume that stock in the Anheuser-Busch Companies, Inc., returns the following percentages. Determine the expected Annual Return Rate for the Anheuser-Busch Companies. Annual Return Rate (x) 20% 50% 30% Probability (p(x)) .20 .30 .50 AP Statistics Answer Key Name:____________________________________ Date:_____________________________________ 1. It is a Probability Distribution because 7 2.415 2 (2.17,11.83) 2. x 20 50 30 p(x) 0.20 0.30 0.50 Total: p( x) 36 / 36 1 2 and 12 are considered unusual x p (x ) 4 15 15 34 Therefore, in the long run, a stockholder will see an expected return of 34% on his/her investment.