On any given day we know a salesman can earn $0 with a 30% probability,$100 with a 20% probability or $300 with 40% probability.His expected earnings equal
A) $0.
B) $140.
C) $300.
D) It cannot be determined from the available information.

Question

Quizplus · Accepted Answer

Expected earnings can be calculated by multiplying the probability of each outcome by its corresponding value and then adding them up. 
Expected Earnings = (0.3 x 0) + (0.2 x 100) + (0.4 x 300) 
Expected Earnings = 0 + 20 + 120 
Expected Earnings = $140

On Any Given Day We Know a Salesman Can Earn