A contractor has a 0.05 probability of making 200,000, a 0.5 probability of making 14,000, a 0.02 probability of losing 1,100,000, and a 0.43 probability of breaking even. What is the contractor‘s expected value?
1 Answer
Nov 6, 2015
Expected value is simply the sum of the products of every possible probability within the distribution times its corresponding amount.
Explanation:
E(x)
I'll leave the arithmetic for you :)
hope that helped