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msouthern msouthern
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A year ago

Question 1.

An architect is considering bidding for the design of a new shopping mall.  The cost of drawing plans and submitting a model is $10,000.  The probability of being awarded the bid is 0.12, and anticipated profits are $100,000, resulting in a possible gain of this amount minus the $10,000 cost for plans and a model.  What is the expected value in this situation?

▸ $12,000

▸ $10,800

$2000

▸ $11,000

Question 2.

A 25 year old can purchase a one-year life insurance policy for $10,000 at a cost of $100.  Past history indicates that the probability of a person dying at age 25 is 0.0015.  Determine the company's expected gain per policy.

▸ 85

▸ 15

▸ 985

▸ 115
Textbook 

Thinking Mathematically


Edition: 6th
Author:
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rinderbikrinderbik
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A year ago
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Answer 1

$2000

Answer 2

85
1

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