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Expected Value, Odds, and Risk
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GMAT
DI.100 Expected Value, Odds, and Risk
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A commission is 5% of the first $100,000 of revenue plus 10% of revenue above $100,000. Revenue is $200,000 with probability 30%, $120,000 with probability 50%, and $60,000 with probability 20%. What is the expected commission?
A
$7,000
B
$8,000
C
$8,600
D
$15,000
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