A man wants to determine whether or not to invest $1000 in a friend's speculative venture. He will do so if he thinks he can get his money back in one year. He believes the probabilities of the various outcomes at the end of one year are as follows:

What would be his expected outcome if he invests the $1000?'

Transcribed Image Text:

Probability 0.3 0.1 0.2 0.3 0.1 Result $2000 (double his money) 500 1000 500 0 (lose everything)