Probability problem 5
5.43 A rock concert promoter has scheduled an outdoor concert on July 4th. If it does not rain, the promoter will make $30,000. If it does rain, the promoter will lose $15,000 in guarantees made to the band and other expenses. The probability of rain on the 4th is A.
a. What is the promoter's expected profit? Is the expected profit a reasonable decision
b. How much should an insurance company charge to insure the promoter's full losses?
Explain your answer.
it seems obvious to me that these problems will affect your grade in a class somehow. in which case we cannot offer you any specific help, but only (maybe) very general guidelines. in what capacity are you allowed to receive help for these? show what you have attempted for these problems