On any given day,a salesman can earn $0 with a 40% probability,$100 with a 40% probability,or $300 with a 20% probability.His expected earnings equal
A)$0.
B)$100 because that is the most likely outcome.
C)$100 because that is what he will earn on average.
D)$200 because that is what he will earn on average.

Question

Quizplus · Accepted Answer

The expected earnings can be calculated as the sum of each outcome multiplied by its probability: (0 * 0.4) + (100 * 0.4) + (300 * 0.2) = 0 + 40 + 60 = $100.

On Any Given Day,a Salesman Can Earn $0 with a 40