1. 11. You are a venture capitalist who has just purchased a stake in a small company. You believe that a year from now this company may no longer exist, in which case your stake is worthless; there is an 80 percent chance of this happening. However, there is a 10 percent chance your stake will be worth $1 million dollars, and a 10 percent chance your stake will be worth $20 million dollars.

What is the expected value of your stake in this young company?