Your company,an online discount pet supply store,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 can be calculated by multiplying the potential loss by the probability of it occurring. 
Expected Loss = Potential Loss * Probability
Expected Loss = ($2,000 + $3,000)/2 * 0.5
Expected Loss = $1,250 
Therefore, the best choice is C.

Your Company,an Online Discount Pet Supply Store,has Calculated That a Loss