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I'm doing some practice study sheets and I'm stuck on this one. Help? 14) Your company is considering developing one of two toy models. The

I'm doing some practice study sheets and I'm stuck on this one. Help?

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14) Your company is considering developing one of two toy models. The projected profits are shown in the tables below. Projected Profit for A Probability Projected Profit B Probability 750,000 0.15 550,000 0.50 100,000 0.70 150,000 0.25 -250,000 0.15 -300,000 0.25 a) Calculate the expected profits for each toaster. Toy A: Toy B: b) Which toaster is the better choice for development based on expected profits? (Circle) Toy A Toy B c) If you're a CEO that is an optimist, which toaster is the better choice? (Circle) Toy A Toy B 15) In the game of Craps, a pair of dice are rolled and people bet on the outcome. For example, you can bet $1 that the dice will total 2. If you win, you receive $30 (your $1 bet, plus $29). If you lose, you lose the $1 that you bet. a) You decide to play one round of craps and bet $1 on 2. Construct a probability distribution for your profit. (Use 4 decimal places for the probabilities.) Outcome Profit Probability WIN LOSE b) Calculate your expected profit for a single bet of $1 on 2. (Give 2 decimal places) c) If you bet a $100 chip on 2, what is your expected profit? d) Is this a fair game? Explain

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