Question

A mining company is considering two sites on which to dig, described as follows:

Site A:
Profit if diamonds are found = $70 million.
Loss if no diamonds are found = $15 million.
Probability of finding diamonds = 0.2

Site B:
Profit if diamonds are found = $140 million.
Loss if no diamonds are found = $21 million.
Probability of finding diamonds = 0.1

What is the expected profit for each site?

Answer 1

I remember this question haha.

Site A: 70 million times 0.2 = 14 million
Site B: 140 million times 0.1 = 14 million

Answer 2

Yeah the choices are A

site A: $2 million; site B: $14 million
B

site A: $14 million; site B: $14 million
C

site A: $14 million; site B: –$4.9 million
D

site A: $2 million; site B: –$4.9 million

Answer 3

yeh so B

Answer 4

So it's this one site A: $14 million; site B: $14 million