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StatisticsQ&A LibraryA construction company has been hired to build a custom home. The builder estimates the probabilities of potential profit (or loss) as shown in the table below. What is the profit expectation for the company? Profit/Loss Probability$100,0000.10 $60,0000.35 $30,0000.35 00.10−$20,0000.08−$40,0000.02Question

Asked Oct 21, 2019

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A construction company has been hired to build a custom home. The builder estimates the probabilities of potential profit (or loss) as shown in the table below. What is the profit expectation for the company?

Profit/Loss |
Probability |
---|---|

$100,000 | 0.10 |

$60,000 | 0.35 |

$30,000 | 0.35 |

0 | 0.10 |

−$20,000 | 0.08 |

−$40,000 | 0.02 |

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Step 1

**Solution:**

The profit expectation for the company is obtained below:

The required probability mass function of *X* is,

Step 2

The required value is**,...**

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