A lawyer believes that the probability is .3 that she can win a discrimination suit.If she wins the case,she will make $40,000;but if she loses,she gets nothing.Assume that she has to spend $5000 preparing the case.What is her expected gain?
A)$35,000
B)$7,000
C)$10,500
D)$9,000

Question

Quizplus · Accepted Answer

The expected gain is calculated as (0.3 * $40,000) - $5,000 = $12,000 - $5,000 = $7,000.

A Lawyer Believes That the Probability Is