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Question
You are considering a sales job that pays you on a commission basis or a salaried position that pays you $50,000 per year. Historical data suggests the following probability distribution for your commission income. Which job has the higher expected income?| Commission | Probability of Occurrence |
| $15,000 | .15 |
| $35,000 | .20 |
| $48,000 | .35 |
| $67,000 | .22 |
| $80,000 | .18 |
A) The salary of $50,000 is greater than the expected commission of $49,630.
B) The salary of $50,000 is greater than the expected commission of $48,400.
C) The salary of $50,000 is less than the expected commission of $50,050.
D) The salary of $50,000 is less than the expected commission of $52,720.
Answer
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