On any given day,a salesman can earn $0 with a 20% probability,$100 with a 40% probability,or $300 with a 20% probability.His expected earnings equal
A) $0.
B) $100 because that is the most likely outcome.
C) $100 because that is what he will earn on average.
D) $200 because that is what he will earn on average.

Question

Quizplus · Accepted Answer

The expected earnings are calculated by multiplying each outcome by its probability and summing these products: (0 * 0.20) + (100 * 0.40) + (300 * 0.20) = 0 + 40 + 60 = $100.

On Any Given Day,a Salesman Can Earn $0 with a 20