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I'm so lost in this class.. Any help would be greatly appreciated!! I posted a question earlier and was shown the formula which was such a huge help. Heres another...


A lawyer sometimes represents clients for a contingency fee. The lawyer only gets paid for services rendered if the client wins the case. Suppose a client is suing for $400,000 and the lawyers fee is 10% of the settlement. The lawyer will spend $2,000 preparing the case and believes there is a 20% chance of winning the case. Find the lawyers expected profit.

 Mar 16, 2019

\(E[profit] = P[win] (\text{profit if win} )+ P[lose](\text{"profit" if lose})= \\ (0.2)((0.1)400000-2000)+ (1-0.2)(-2000) = \$6000 \)

 Mar 16, 2019

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