Question

A company plans a major investment and theamount of profit is uncertain, but researchersgive the following estimate for the distribution.1.5210Profit(inmillions)Probability0.10.20.40.20.1What is the expected value of the profit?[?] million dollars

Answer 1

3

Explanation:

i just know that's the answer lol i just answered that question

Answer 2

The expected value is the return you expect from some kind of investment/action.

When we are presented with probabilty of an action, we can take the expected value of the whole table [investment] by taking the sum of the products of probability and the action.

Here, we want products of "probability" and "profit". Then we sum it. Shown below:

`\begin{gathered} E=(0.1)(1)+(0.2)(1.5)+(0.4)(2)+(0.2)(4)+(0.1)(10) \\ E=3 \end{gathered}`

Expected value of profit = 3 million dollars