Question

A sales analyst listed the probabilities of profits and losses in dollars for a certain company. Find the mean, µ for the probability distribution.

x P(x)
-500 0.076
-250 0.191
0 0.265
250 0.316
500 0.152

Answer 1

The mean is
`\mu = 69.25`

Explanation:

We are given the following distribution:

P(x = -500) = 0.076

P(x = -250) = 0.191

P(x = 0) = 0.265

P(x = 250) = 0.316

P(x = 500) = 0.152

Find the mean, µ for the probability distribution.

To find the mean, we multiply each outcome by its probability. So

`\mu = -500*0.076 - 250*0.191 + 0*0.265 + 250*0.316 + 500*0.152 = 69.25`

The mean is
`\mu = 69.25`