Hi all, I was working through the 2nd order stochastic dominance calculations, but I was getting different results to their example question's answer, which is attached to this post. For the cummulative CDF calculation, my method was to integrate under the area of the CDF. Their method was to sum the values of the CDF. Although both methods lead to the same conclusion, they have different timings for the numbers, so the difference may result in lost marks. My cummulative CDF would only be non-zero one value after the CDF is non-zero. This made sense to me because the integral does not instantly jump up, unlike the CDF. Can anyone confirm whether there is a mistake in the answer or a problem with my reasoning? Thanks
Integrating the area under the CDF works for continuous distributions; however, in this example question, the discrete distribution of what the return could be explains why they performed the sum instead.
