A U.S. firm holds an asset in Great Britain and faces the following scenario:

	State 1				State 2				State 3
Probability	25%				50%				25%
Spot rate	$	2.20	/		$	2.00	/		$	1.80	/
P*		3,000				2,500				2,000
P	$	6,600			$	5,000			$	3,600

Multiple Choice

• none of the options

• $5,050

• $2,112.50

• $3,700

A U.S. firm holds an asset in Great Britain and faces the following scenar State 1 State 2 State 3 Probability 25% 50% 25% Spot rate $ 2.204 $ 2.00 $ 1.80 3,000 2,500 2,000 $6,600 $5,000 $3,600 ** where, p* = Pound sterling price of the asset held by the U.S. firm P= Dollar price of the same asset The expected value of the investment in U.S. dollars is