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
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
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 |
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
