Tag | Value |
---|---|
file | Probability_uva-expected-value-1137-en_uva-expected-value-1137-en |
name | uva-expected-value-1137-en |
section | Probability/Elementary Probability/Random variables/Expected value |
type | schoice |
solution | TRUE, FALSE, FALSE, FALSE |
Type | Calculation |
Language | English |
Level | Statistical Literacy |
IRT-Difficulty | 2.908 |
p-value | 0.4131 |
Daan pays €30 a year for device insurance. He thinks that the probability is 0.1 that in the next year the device will need to be needs to be repaired, and the probability of more than one repair is then 0. A repair costs €100 if he does not take insurance, and costs nothing if he does take insurance. Suppose X is the cost of the possible repair and the possible insurance, what is the expected profit or loss for Daan if he does not take insurance?