I'm having trouble with the last part of this question:
I have the profit formula g(X) as a function of X the random variable determined by the cost of the further work:
g(X)=1.1X + 1.1(20)
g(X)=1.1X + 22
so E(g(X))=1.1(4) + 22 = 26.4million
the s.d is the root of the variance var(g)= (a^2)(var(X)) for aX+b
so my calculations give the variance as (1.1^2)(1^2) = 1.21
so s.d = 1.1 million
but the answer in the back of the book is 1million.
Would someone be able to tell me where I am going wrong???