CORRECT ANSWER: D
Explanation: I just did the work, but the y’s on the first two match up and they match in the second two. It’s D
Answer:
$190.50
Step-by-step explanation:
Expected value is the sum of each possible income multiplied by its probability.
There's a 5% chance that the vendor makes $200 and loses $190 (net gain of $10).
There's a 95% chance that the vendor makes $200 and loses $0 (net gain of $200).
So the expected value is:
Exp(RS) = $10 × 0.05 + $200 × 0.95
Exp(RS) = $190.50
