Answered

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Darya is a real estate broker with a house listing. She estimates that this listing will cost her ​$2300 for various expenses. If Darya sells the house within 6​ months, she will receive a commission of ​$20,000. If it takes longer than 6​ months, the listing will​ expire, and​ she'll lose the ​$2300 she spent on expenses. She estimates the probability that​ she'll sell the house within 6 months is 80%. Determine​ Darya's expectation for this listing.

Sagot :

Using a discrete distribution, it is found that Darya's expectation for this listing is of $13,700.

What is the mean of a discrete distribution?

The expected value of a discrete distribution is given by the sum of each outcome multiplied by it's respective probability.

In this problem, considering the situation described in the text, the distribution is given by:

  • P(X = 17,700) = 0.8.
  • P(X = -2,300) = 0.2.

Hence, her expectation is given by:

E(X) = 0.8 x 17,700 - 0.2 x 2,300 = $13,700.

More can be learned about discrete distributions at https://brainly.com/question/24855677

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