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Statistics and Probability

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Expected Value of Discrete Random Variable

STATS-OYVXMV

The investment outcomes and corresponding probabilities for an oil well you own are:

x = the outcome in \$ p(x)
-40,000 (no oil) 0.25
10,000 (some oil) 0.70
70,000 (much oil) 0.05

What is the expected monetary outcome from your oil well?

A

$-\$500$

B

$\$500$

C

$\$10,000$

D

$\$0.00$