Find the Mean of the Given Probability Distribution A) $\mu = 3.40$

question 90

Multiple Choice

Find the mean of the given probability distribution.
-The random variable x is the number of houses sold by a realtor in a single month at the Sendsom's Real Estate office. Its probability distribution is as follows.

$\begin{array}{c|c}\text { Houses Sold }(\mathrm{x}) & \text { Probability } \mathrm{P}(\mathrm{x}) \\\hline 0 & 0.24 \\1 & 0.01 \\2 & 0.12 \\3 & 0.16 \\4 & 0.01 \\5 & 0.14 \\6 & 0.11 \\7 & 0.21\end{array}$

• A) \(\mu = 3.40\)
• B) \(\mu = 3.60\)
• C) \(\mu = 3.35\)
• D) \(\mu = 3.50\)

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Definitions:

Independent Projects

Investment projects whose cash flows are not affected by the accept or reject decision for any other project, allowing for independent evaluation.

IRR

Internal Rate of Return, a financial metric used to estimate the profitability of potential investments through calculating the rate of return where the net present value of all the cash flows (both positive and negative) from a project or investment equal zero.

Payback Period

A rephrased definition: The duration needed to recover the initial expenditure on an investment through the cash flows it generates.