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Statistics:Expected value.

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As a birthday gift, you are mailing a new personal digital assistant (PDA) to your cousin in Toledo. The PDA cost $250. There is a 2 percent chance it will be lost or damaged in the mail. Is it worth $4 to insure the mailing? Explain, using the concept of expected value.

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Solution Summary

The problem deals with calculating the expected value of a decision.

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  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
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