Find the expected value.Mr. Cameron is sponsoring an summer concert. He estimates that he will make $300,000 if it does not rain and make $60,000 if it does rain. The weather bureau predicts the chance of rain is 0.34 for the day of the concert. An insurance company is willing to insure the concert for $150,000 against rain for a premium of $30,000. If he buys this policy, what are his expected earnings from the concert?

Question

A. $180,000
B. $300,000
C. $270,000
D. $239,400

Answer 1

Answer: D