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Statistics expectation q

This is the link to the question, it's question 4ii:

http://www.mei.org.uk/files/papers/s108ja_leqa.pdf

I found the expectation in the first part of the q to be 2.952. The question says it costs £45,000 to investigate each site and to find the total cost. I can see from the table there's 4 sites and the expectation formula is E = n x p so why can't the answer be E = 4 x 0.2 as it says the probability of finding oil is 0.2?

The answer is actually 2.952 x £45,000 but I don't understand why. What information did the expectation even give me?

Thanks :smile:
Reply 1
The expectation is the expected number of sites checked.
Reply 2
Original post by Magenta96
This is the link to the question, it's question 4ii:

http://www.mei.org.uk/files/papers/s108ja_leqa.pdf

I found the expectation in the first part of the q to be 2.952. The question says it costs £45,000 to investigate each site and to find the total cost. I can see from the table there's 4 sites and the expectation formula is E = n x p so why can't the answer be E = 4 x 0.2 as it says the probability of finding oil is 0.2?

The answer is actually 2.952 x £45,000 but I don't understand why. What information did the expectation even give me?

Thanks :smile:

If oil is found, then they stop at that site. So you need to find the expected number of sites visited, and multiply by the cost of investigating each site.
Reply 3
Original post by BabyMaths
The expectation is the expected number of sites checked.


So does the table's r values basically just show if they visited those sites, those would be the probabilities but they only actually visited 2.952 sites?
Reply 4
Original post by Magenta96
So does the table's r values basically just show if they visited those sites, those would be the probabilities but they only actually visited 2.952 sites?


No they didn't visit 2.952 sites. How would they do that?

The visit 1, 2, 3 or 4 sites with various probabilities.

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