Question

A dealer in rain coats can earn Rs.500/day, when it rains. He looses Rs.200/day when it is fair day. If the chance of a fair day is 0.6. then his mean profit is

• A. 80/day
• B. 70/day
• C. 60/day
• D. 90/day

Answer 1

Answer: (A)

80/day

Answer 2

Let X be his profit, then X = {Rs.200/-, Rs.500/-}

P(X = -200) = 0.6, P(X = 500) = 0.4

Mean profit = $\sum \mathrm { xP } ( \mathrm { x } ) = - 200 \mathrm { x } \frac { 6 } { 10 } + 500 \times \frac { 4 } { 10 }$

= -120 + 200 = Rs.80 / day.