Compute amount of randomly selected investment

Reference no: EM131762484

Question: Making a profit Rotter Partners is planning a major investment. From experience, the amount of profit X (in millions of dollars) on a randomly selected investment of this type is uncertain, but an estimate gives the following probability distribution:

Based on this estimate, μX = 3 and σX = 2.52. Rotter Partners owes its lender a fee of $200,000 plus 10% of the profits X. So the firm actually retains Y = 0.9X - 0.2 from the investment. Find the mean and standard deviation of Y. Show your work.

Reference no: EM131762484

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