Lobster Liquidators will make $550,000 if the fishing season weather is good, $240,000 if the weather is fair, and would actually lose $40,000 if the weather is poor during the season. If the weather service gives a 45% probability of good weather, a 25% probability of fair weather, and a 30% probability of poor weather, what is the expected monetary value for Lobster Liquidators?

Question

Quizplus · Accepted Answer

0.45 ($550,000) + 0.25 ($240,000) + 0.3 (-$40,000) = $295,500

Lobster Liquidators Will Make $550,000 If the Fishing Season Weather