Question

3. The probability that a Wall Street stock market investor will sell his stocks at a profit of $ 7000 is 0.19 , the probability to sell at a profit of $ 4000 is 0.38 , the probability to break even is 0.32 and the probability that he will sell at a loss of $ 5000 is 0.11 . What is his expected profit ? 4. A small company must decide whether to merge with a larger company to make more investments. If they merge and it is a good sales year, there will be a $840,000 profit; if they merge and it is a poor sales year, there will be a deficit of $ 260,000. If they do not merge and it is a good sales year there will be a $480,000 profit; if they do not merge and it is a poor sales year there will be a $52,000 profit. If the probability of a good sales year is 0.30 and the probability of a poor sales year is 0.70, what is the expected profit? 5. A coin is tossed 431 times. Use Binomial Distribution to approximate the probability of getting at most 235 tails.

Answer 1

sol 3 Break even occurs where equal to Zero which and revenue minus cost there is Profit no loss. Expected profit = E(P) be ECP) E P*P(*) 7000 * 0.19 + 4000 *0.30 + 0*0.32 +(-5000 *0.11) " 1330 +1520 +0 - 550 = $300 expected profit to attempt only Due to HomeworkLib policy, I have frost question, Thank you. CS Scanned with CamScanner