Mathematics, 21.11.2019 01:31 jacamron
An oil wildcatter owns the drilling rights at two widely separated locations. after consulting a geologist, he feels that at each location the probability of discovering oil if a well is drilled is 10%. a well costs $100,000 to drill, and this is a total loss if no oil is found. on the other hand, if oil is discovered, the oil can be sold for $1,700,000. the wildcatter has $100,000 available for drilling expenses. find the mean and standard deviation of the wildcatter's net profit, (a) if the $100,000 is used to drl a single well, (b) if the wildcatter finds a partner to share costs and profits with equally (each will receive of the final profit, positive or negative) and their pooled funds are used to drill wells in both locations. (advice: work in units of $100,000 to simplify your calculations.)
Answers: 3
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An oil wildcatter owns the drilling rights at two widely separated locations. after consulting a geo...
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