5 An oil exploration firm is formed with enough capital to f

(5) An oil exploration firm is formed with enough capital to finance explorations. The probability of a particular exploration being successful is 0.1. Assume that the explorations are independent. Find the mean and variance of the number of successful explorations.

Solution

Mean and variance of the number of successful explorations are:

E(X) = 10 x 0.1 =1

Var(X) = 10 x 0.1 x 0.9 = 0.9