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28 December, 19:39

A lawyer believes that the probability is. 3 that she can win a discrimination suit. if she wins the case she will make $40,000, but if she loses she gets nothing. assume that she has to spend $5000 preparing the case. what is her expected gain?

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  1. 28 December, 20:06
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    Her expected gain is $7,000 based on the information shown on the question above. This problem can be solved by using the expected value formula which stated as EV = W*Pw-L*Pw where EV is the expected value, W is the win value, Pw is the probability of winning, L is the lost value and Pl is the probability of losing. Calculation: 7,000 = (40,000-5,000) * 0.3 - 5,000 * (1-0.3)
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Home » Business » A lawyer believes that the probability is. 3 that she can win a discrimination suit. if she wins the case she will make $40,000, but if she loses she gets nothing. assume that she has to spend $5000 preparing the case. what is her expected gain?
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