Statistics for Business: Decision Making and Analysis, 3rd Edition

1. 1. ... total salary allocated to benefits?²

      ² E(Y) = 0.10(0.75) + 0.20(0.25) = 0.125

   2. What is the expected total cost of hiring a new employee?³

      ³ E(T) = E(X) E(1 + Y) = (80,000(0.4) + 100,000(0.4) + 140,000(0.2)) (1 + .125) = (100,000)(1.125) = $112,500

4M Analytics 10.1 Exchange Rates

Motivation State the Question

Companies in the United States that do business internationally worry about currency risk. If a customer in Europe pays in euros, a company in the United States has to convert those euros into dollars to pay its employees. Exchange rates between currencies fluctuate, so €100 today won’t convert to the same number of dollars tomorrow. Whatever ...