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In: Finance

Problem 6.3 You have chosen biology as your college major because you would like to be...

Problem 6.3

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 $274,000 per year. However, if you are not accepted, then you would choose to work in a zoo, where you will earn $45,000 per year. Without considering the additional years, you would spend in school if you study medicine or the time value of money.

Your answer is correct.
What is your expected starting salary? (Round answer to 2 decimal places, e.g. 15.25.)
Expected starting salary $

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Your answer is incorrect. Try again.
What is the standard deviation of that starting salary? (Round answer to 2 decimal places, e.g. 15.25.)

Standard deviation $

Solutions

Expert Solution

Expected Salary = $67900.00

Standard Deviation = $68700.00


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