Your company,an online discount stationers,has calculated that a loss of Internet connectivity for 3 hours results in a potential loss of $2,000 to $3,000 and that there is a 50% chance of this occurring each year.What is the annual expected loss from this exposure?
A)$500
B)$1,000
C)$1,250
D)$1,500
E)$2,500

Question

Quizplus · Accepted Answer

The annual expected loss from this exposure can be calculated as follows: 
Expected loss = (potential loss) x (probability of occurrence) = ($2,000 to $3,000) x 0.5 = $1,000 to $1,500. 
Therefore, the best choice is C, $1,250, which falls within the range of the expected loss.

Your Company,an Online Discount Stationers,has Calculated That a Loss of Internet