# Rock concert probability!

• Apr 11th 2008, 05:57 AM
matty888
Rock concert probability!
A rock concert producer has scheduled an outdoor concert. If it is warm that day, she expects to make a €20,000 profit. If it is cool that day, she expects to make a €5,000 profit. If it is very cold that day, she expects to suffer a €12,000 loss. Based upon historical records, the weather office has estimated the chances of a warm day to be .6 and the chances of a cool day to be .25. What is the producer’s expected profit?
• Apr 11th 2008, 06:09 AM
mr fantastic
Quote:

Originally Posted by matty888
A rock concert producer has scheduled an outdoor concert. If it is warm that day, she expects to make a €20,000 profit. If it is cool that day, she expects to make a €5,000 profit. If it is very cold that day, she expects to suffer a €12,000 loss. Based upon historical records, the weather office has estimated the chances of a warm day to be .6 and the chances of a cool day to be .25. What is the producer’s expected profit?

(20,000)(0.6) + (5,000)(0.25) + (-12,000)(0.15) = ......

Do you understand where the stuff in red comes from?
• Apr 11th 2008, 06:29 AM
matty888
yep understand it now thanks!!(Handshake)