Consider a binomial tree with one future period (T=0,1) in which the price can go up to $30 or decrease to $15. The price of the asset at T=0 is $20, and there is a 20% probability that it goes up at T=1. The investor starts with an initial wealth of $1,000. The risk-free asset yields a return of zero percent.

What is the expected terminal wealth of the investor if she invests 70% of her wealth in the risky asset?

Select one:

1175

930

1245

None of the options provided

1088

500