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Computation of expected value and standard deviation.
Myers Business Systems is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are given below:
Possible Market Reaction
Sales in Units
Probabilities
Low response
20
0.1
Moderate response
40
0.3
High response
55
0.4
Very high response
70
0.2
a) What is the expected value of unit sales for the new product?
b) What is the standard deviation of unit sales?
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