Question

Now that the new models are available, a car dealership has lowered the prices on last year’s models in order to clear its holdover inventory. With prices slashes, a salesman estimates the following probability distribution of X, the total number of cars that he will sell next week:

X	P(X)
0	0.05
1	0.15
2	0.35
3	0.25
4	0.20

1. What are the “expected value” and “standard deviation” of X?   Be sure to show your work?
2. If I were to compute the conventional mean of X, my answer would be X-bar = 2. Why does the answer in (a) differ?

Answer 1