Question
Suppose that each of two investments has a 4% chance of a loss of $10 million, a 2% chance of a loss of $1 million,
Suppose that each of two investments has a 4% chance of a loss of $10 million, a 2% chance
of a loss of $1 million, and a 94% chance of a prot of $1 million. Both investments are
independent of each other.
What is the expected value of each investment project?
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Financial Modeling
Authors: Simon Benninga
4th Edition
0262027283, 9780262027281
