Business projection: An investor is considering an investment in a start-up company. She estimates that she has probability 0.39 of a $24,000 loss, probability 0.21 of a $6900 profit, probability 0.14 of a $38,000 profit, and probability 0.26 of breaking even (a profit of $0). What is the expected value of the profit? Would you advise the investor to make the investment? The expected value of the profit is $____

Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
Section: Chapter Questions
Problem 35T
icon
Related questions
Question
Business projection: An investor is considering an investment in a start-up company. She estimates that she has probability 0.39 of a $24,000 loss, probability 0.21 of a $6900 profit, probability 0.14 of a $38,000 profit, and probability 0.26 of breaking even (a profit of $0). What is the expected value of the profit? Would you advise the investor to make the investment? The expected value of the profit is $____
Expert Solution
steps

Step by step

Solved in 3 steps with 1 images

Blurred answer
Recommended textbooks for you
Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage
Calculus For The Life Sciences
Calculus For The Life Sciences
Calculus
ISBN:
9780321964038
Author:
GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:
Pearson Addison Wesley,
Algebra and Trigonometry (MindTap Course List)
Algebra and Trigonometry (MindTap Course List)
Algebra
ISBN:
9781305071742
Author:
James Stewart, Lothar Redlin, Saleem Watson
Publisher:
Cengage Learning
College Algebra
College Algebra
Algebra
ISBN:
9781938168383
Author:
Jay Abramson
Publisher:
OpenStax