You have chosen biology as your college major because you would like to be a med

Question

You have chosen biology as your college major because you would like to be a medical doctor. However, you find that the probability of being accepted to medical school is about 10 percent. If you are accepted to medical school, then your starting salary when you graduate will be R300,000 per year. However, if you are not accepted, then you would choose to work in a zoo, where you will earn R40,000 per year. Without considering the additional years you would spend in school if you study medicine or the time value of money, what is your expected starting salary as well as the standard deviation of that starting salary?

Explanation / Answer

expected starting salary : [300000*.10]+[40000*.90]

              = 30000+ 36000

              = 66000

b)Standard deviation =square root of variance

           = SR [6,084,000,000]

             = 78000

Probability salary (x) variance = [x-66000]^2p .10 300,000 [300000-66000]^2*.10= 5475600000 .90 40,000 [40000-66000]^2*.90= 608400000 6,084,000,000

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