Question 4

4. An investment counselor calls with a hot stock tip. He believes that if the economy remains strong, the investment will result in a profit of $65,000. If the economy grows at a moderate pace, the investment will result in a profit of $30,000. However, if the economy goes into recession, the investment will result in a loss of $40,000. You contact an economist who believes there is a 30% probability the economy will remain strong, a 60% probability the economy will grow at a moderate pace, and a 10% probability the economy will slip into recession. What is the expected profit from this investment and explain your result? Show x and p(x) values. Write formula and round your final solution to two decimal places. Show your work