Answered step by step
Verified Expert Solution
Question
1 Approved Answer
An investor is considering a 10,000 investment in a start up company. She estimates that she has a probability 0.38 of a 14,000 dollar loss,
An investor is considering a 10,000 investment in a start up company. She estimates that she has a probability 0.38 of a 14,000 dollar loss, probability 0.20 of a 6,000 profit, probability 0.12 of a 38,000 profit, and probability 0.3 of breaking even ( a profit of 0). What is the expected Value of the profit? Would you advise the investor to make the investment?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started