The table shows a probability distribution for your company’s EPS for the current fiscal year. What...

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Question

The table shows a probability distribution for your company’s EPS for the current fiscal year. What is the expected value of your company’s EPS for the current fiscal year?

Probability	0.15	0.45	0.24	0.16	1.00
EPS	$2.60	$2.45	$2.20	$2.00

Answer 1

Answer #1

Expected value = X * P(X)

= 0.15 * 2.60 + 0.45 * 2.45 + 0.24 * 2.20 + 0.16 * 2

= 2.3405

E(X) = $2.34

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Answer 2

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