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A Company Believes That There Is a 25% Chance of Making

Question 18

Essay

A company believes that there is a 25% chance of making a daily profit of $500, a 35% chance that it will be $1000 and 40% chance that it will be $1500.
a. Find the expected value.
b. Find the standard deviation.

Correct Answer:

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a. E(X) = Σ xP(x) = $500(0.25) + $1000(0...

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