Thinking Mathematically (6th Edition)

Published by Pearson
ISBN 10: 0321867327
ISBN 13: 978-0-32186-732-2

Chapter 11 - Counting Methods and Probability Theory - 11.8 Expected Value - Exercise Set 11.8 - Page 754: 5

Answer

See below.

Work Step by Step

By definition, the expected value is the sum of each outcome multiplied by its probability. Hence here the expected value: $0.1\cdot100000-10000=0$. Hence the expected value is $0$, thus it is not worth for the architect to bid, because in the long run he wouldn't win anything.
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