 |
| ||
| |||
|
| Math Central | Quandaries & Queries |
|
Question from melanie, a student: The probabilities are 0.24 , 0.35 , 0.29 , and 0.12 that a speculator will be able to sell a subdivision lot within a year at a profit of P120, 500 , at a profit of P80,000 , at a profit of P40,000 , or at a lost of P60,000 respectively . What is his expected profit ? |
Hi Melanie,
In statistical language you have a random variable, profit, which can take on any of 4 possible values. You also have the probabilities that the random variable takes on each of the 4 values. To find the expected value of the random variable, multiply each possible value by its probability and add the 4 resulting number.
Write back if you need more assistance.
Penny
| ||
| ||
| ||
 |
 |
|
Math Central is supported by the University of Regina and The Pacific Institute for the Mathematical Sciences.