(a) Loraine Corporation is planning to market a new makeup product. According to the analysis made by the financial department of the company, it will earn an annual profit of $4.5 million if this product has high sales, an annual profit of $1.2 million if the sales are mediocre, and it will lose $2.3 million a year if the sales are low. The probabilities of these three scenarios are 0.32, 0.51 and 0.17 respectively. Let x be the profits (in millions of dollars) earned per annum by the company from this product. Write the probability distribution of x. ii. Calculate the mean and standard deviations of x.

(a) Loraine Corporation is planning to market a new makeup product. According to the analysis made by the financial department of the company, it will earn an annual profit of $4.5 million if this product has high sales, an annual profit of $1.2 million if the sales are mediocre, and it will lose $2.3 million a year if the sales are low. The probabilities of these three scenarios are 0.32, 0.51 and 0.17 respectively. Let x be the profits (in millions of dollars) earned per annum by the company from this product. Write the probability distribution of x. ii. Calculate the mean and standard deviations of x.

College Algebra

7th Edition

ISBN:9781305115545

Author:James Stewart, Lothar Redlin, Saleem Watson

Publisher:James Stewart, Lothar Redlin, Saleem Watson

Chapter9: Counting And Probability

Section9.4: Expected Value

Problem 1E: If a game gives payoffs of $10 and $100 with probabilities 0.9 and 0.1, respectively, then the...

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