Question

A contractor has submitted bids on three state jobs: an office building, a theater, and a parking garage. State rules do not allow a contractor to be offered more than one of these jobs. If this contractor is awarded any of these jobs, the profits earned from these contracts are: $12 million from the office building, $7 million from the theater, and $4 million from the parking garage. His profit is zero if he gets no contract. The contractor estimates that the probabilities of getting the office building contract, the theater contract, the parking garage contract, or nothing are 0.16, 0.29, 0.41 , and 0.14, respectively. Let x be the random variable that represents the contractor's profits in millions of dollars. Write the probability distribution of x. Find the mean and standard deviation of x.
Round your answers to three decimal places, if required.
Mean = _____
Standard deviation = _____

Answer 1

Mean value is

Now to find standard deviation we will first find

So standard deviation is