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borteleto borteleto
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5 years ago
You are considering a sales job that pays you on a commission basis or a salaried position that pays you $50,000 per year. Historical data suggests the following probability distribution for your commission income. Which job has the higher expected income?

CommissionProbability of Occurrence
$15,000.15
$35,000.20
$48,000.35
$67,000.22
$80,000.18

A) The salary of $50,000 is greater than the expected commission of $49,630.
B) The salary of $50,000 is greater than the expected commission of $48,400.
C) The salary of $50,000 is less than the expected commission of $50,050.
D) The salary of $50,000 is less than the expected commission of $52,720.
Textbook 
Foundations of Finance

Foundations of Finance


Edition: 9th
Authors:
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guzmanguzman
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borteleto Author
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#2
5 years ago
I'm still confused, but thanks for answering correctly
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