To find the expected value as well as variance using probability distribution.
The budgeting process for a Midwestern college caused in expense forecasts for the coming year (in $ millions) of $9, $10, $11, $12, and $13. For the reason that the actual expenses are unknown the following respective probabilities are assigned- .3, .2, .25, .05, and .2.
1) Show the probability distribution for the expense forecast.
2) What is the expected value of the expense forecast for the coming year?
3) What is the variance of the expense forecast for the coming year?
4) If income projections for the year are estimated at $12 million comment on the financial position of the college.