# 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\$100,0000.10 \$60,0000.35 \$30,0000.35          00.10−\$20,0000.08−\$40,0000.02

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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 0.10 0.35 0.35 0.10 0.08 0.02
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## Expert Answer

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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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