Question Two

The director of finance, for a farm cooperative is concerned about the yields per acre she can expect from the year's corn crop. The probability distribution of the yield for the current weather conditions is given below:

Yield in kg per acreProbability

1200.18

1400.26

1600.44

1800.12

She would like to see a simulation of the yield she might expect over the next 10 years for weather conditions similar to those she is now expecting.

(a) Simulate the average yield she might expect per acre using the following random numbers: 20, 72, 34, 54, 30, 22, 48, 74, 76, 02.

She is also interested in the effects of market price fluctuations on the cooperative's farm revenue. She makes this estimate of per-kg price for corn.

Price per kgProbability

2.000.05

2.100.15

2.200.30

2.300.25

2.400.15

2.500.10

(b) Simulate the price she might expect to observe over the next 10 years using the following random numbers: 82, 95, 18, 96, 20, 84, 56, 11, 52, 03.