Stats: Data and Models (3rd Edition)

Published by Pearson
ISBN 10: 0321692551
ISBN 13: 978-0-32169-255-9

Chapter 16 - Random Variables - Exercises - Page 400: 8

Answer

$10600$

Work Step by Step

The expected amount can be obtained by summing the product of the possibilities and their probabilities: $EV=\sum xP(x)=80000\cdot0.2\cdot0.3+30000\cdot0.2\cdot0.7+30000\cdot0.8\cdot0.3-10000\cdot0.8\cdot0.7=4800+4200+7200-5600=10600$
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