You have a small business that makes and sells cowboy hats. the number of hats you...

You have a small business that makes and sells cowboy hats. the number of hats you make and sell per week is a random variable x. the mean of x is 40 hats and the standard deviation of x is 3 hats. each hat sells for $50. your weekly costs of production are a random variable Y. the mean of Y is $600 and the standard deviation of Y is $100. the covariance between x and y is negative. Cov(x,y) is minus 25 hats times dollars.

a) Profit is revenue from selling hats minus production costs. Let W represent weekly profit, in dollars. Calculate the expected weekly profit.

b) Calculate the variance of weekly profit.

c) Assume that both X and Y are approximately normally distributed. what is the probability that weekly profit will be more than $1,150? Four decimals

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Expert Solution

orchestra answered 1 year ago

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