My Math Forum The expected gain, given a Binomial Distribution?

 October 2nd, 2007, 04:59 PM #1 Newbie   Joined: Oct 2007 Posts: 1 Thanks: 0 The expected gain, given a Binomial Distribution? I understand the concept of a Binomial Distribution, and mean and variance. But asked to calculate expected gain I'm stumped! Here's a problem: 10 motors are packaged for sale in a warehouse. The motors sell for 100$each, but a double-your-money-back guarantee is in effect for any defectives the purchaser may receive. Find the expected net gain for a seller if the probability of any one motor being defective is 0.08 Would it be the 10 (probability of an undefective motor times 100 + probability of a defective motor times 200?) Help, please!!!! The answer is 840$!

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# expected gain in binomial distribution

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