Question

In: Statistics and Probability

Jake is hoping to be promoted to head pharmacist and make $120,000/year starting next year. He...

Jake is hoping to be promoted to head pharmacist and make $120,000/year starting next year. He thinks he has a 60% chance of being promoted. His current salary is $70,000/year. If he is not promoted, he will earn his current salary next year.

What is his mean salary for next year?

What is the variance of his salary for next year?

What is the standard deviation of his salary for next year?

Solutions

Expert Solution

Solution:

Given: Jake is hoping to be promoted to head pharmacist and make $120,000/year starting next year. He thinks he has a 60% chance of being promoted. His current salary is $70,000/year. If he is not promoted, he will earn his current salary next year.

P(promoted) = 60% = 0.60

P(Not promoted) =1 - 0.60 = 0.40

Thus we have:

Promoted	Probability	Salary
Yes	0.60	120000
No	0.40	70000

We have to find mean , Variance and standard deviation of his salary for next year.

Formula:

Mean:

Variance:

Standard Deviation:

Thus we need to make following table:

Promoted	Probability P(x)	Salary x	x *P(x)	x² *P(x)
Yes	0.6	120000	72000	8640000000
No	0.4	70000	28000	1960000000

Thus

Part i)

Mean:

Part ii)

Variance:

Part iii)

Standard Deviation:

orchestra answered 1 year ago

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