Mathematics, 07.08.2021 14:00 skrska
The point guard of a basketball team has to make a decision about whether or not to shoot a three-point attempt or pass the ball to another player who will shoot a two-point shot. The point guard makes three-point shots 30 percent of the time, while his teammate makes the two-point shot 48 percent of the time.
Xi
3
0
P(xi)
0.30
0.70
Xi
2
0
P(xi)
0.48
0.52
What is the expected value for each choice?
Should he pass the ball or take the shot himself? Explain.
Claire is considering investing in a new business. In the first year, there is a probability of 0.2 that the new business will lose $10,000, a probability of 0.4 that the new business will break even ($0 loss or gain), a probability of 0.3 that the new business will make $5,000 in profits, and a probability of 0.1 that the new business will make $8,000 in profits.
Claire should invest in the company if she makes a profit. Should she invest? Explain using expected values.
If Claire’s initial investment is $1,200 and the expected value for the new business stays constant, how many years will it take for her to earn back her initial investment?
Answers: 2
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