Paul started work at company B ten years ago at the salary of $30,000. At the same time Sharla started at Company C at the salar
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Answer:
The expected value of Jordan gains is -1 dollar.
Step-by-step explanation:
Consider the following random variables. X := #of shots that Jordan makes. Then, we can can define the random variable Y of the earnings of Jordan in a game as follows
Y = 5 if X=2 (since he gets 10, but invested 5), Y=0 if X=1(since he gets the 5 back) and Y=-5 if X=0(since he doesn't get the money back). Then, in this case, we can define the probability as follows.
P(Y=5) = P(X=2), P(Y=0) = P(X=1), P(Y=-5)= P(X=0).
By definition, the expected value of Y is given by
. By the previous analysis, we have that
We only need to calculate the probabilities for X. In this case, we can consider each shot independt from each other. Then, we can consider X to be distributed as a binomial random variable with n=2 trials and p=0.4 of success (since he has a 40% chance of winning).
Then, by definition
where
Then,
Then,