Question

A businesswoman estimates there is a 55% chance she will make 69000 and 45% chance she will lose 58000 what is her expected value

Answer 1

Answer: $11,850

Explanation:

To find the expected value (expected monetary outcome) for the businesswoman's situation, you can use the following formula:

Expected Value = (Probability of Outcome 1 * Outcome 1) + (Probability of Outcome 2 * Outcome 2) + ...

In this case, there are two possible outcomes:

Outcome 1: She makes $69,000 with a probability of 55% (or 0.55).

Outcome 2: She loses $58,000 with a probability of 45% (or 0.45).

Now, calculate the expected value:

Expected Value = (0.55 * $69,000) + (0.45 * -$58,000)

Expected Value = $37,950 - $26,100

Expected Value = $11,850

So, her expected value is $11,850. This means, on average, she can expect to gain $11,850 in this situation.