strange math question

Archive SAT Subject Test Preparation
1

<p>Jim owns a small business. By Jim’s estimate, he has a 40%
chance of making a $5000 profit in the next year and a 60%
chance of losing $2000. If an “expected profit” is the product of a
profit and the probability of making that profit, what is Jim’s
expected profit in the next year? </p>

<p>(A) —$200
(B)$800
(C)$2200
(D)$3000
(E)$7000</p>

<p>answer is (B)</p>

2

<p>0.4(5000) - 0.6(2000) = $800</p>

3

<p>thank you. i should probably change the title of this thread seeing that the ans was pretty straightforward ;)</p>

4

<p>I don’t get it :$</p>

5

<p>^Look up “expected value.”</p>