Asked by
Emily Kavensky
on Oct 13, 2024
Verified
A contractor is considering a sale that promises a profit of $24,000 with a probability of 0.7 or a loss (due to bad weather,strikes,and such) of $16,000 with a probability of 0.3.What is the expected profit?
A) $8000
B) $16,800
C) $28,000
D) $21,600
E) $12,000
Expected Profit
The forecasted amount of profit, calculated as the sum of all possible profits each multiplied by their probabilities of occurrence.
Probability Of
The likelihood or chance of a specific event occurring within a set of possible outcomes.
Major Loss
A significant financial setback or damage, often used in the context of insurance, investments, or business operations.
- Execute the principle of expected value throughout multiple contexts.
- Calculate the anticipated value of discrete random variables.
Verified Answer
BO
Learning Objectives
- Execute the principle of expected value throughout multiple contexts.
- Calculate the anticipated value of discrete random variables.