9.4 Comparing Random Variables
Expressions that combine random variables with constants often arise when comparing random variables. Comparison requires putting the random variables on a common scale. Consider the following example.
An international business based in the United States is considering launching a product in two locations. One location is in Europe, and the other is in India. Regional management in each location offers a random variable to express what it believes will happen if the product is launched. These random variables are expressed in the local currency. The division in Europe believes that the launch will produce net profits of 2.5 million euros in the first year, with standard deviation 0.75 million euros. The division ...
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