An investor is considering a $10,000 investment in a start-up company. She estimates that she has...
An investor is considering a $10,000 investment in a start-up company. She estimates that she has probability 0.39 of a $22,200 loss, probability 0.23 of a $14,900 profit, probability 0.14 of a $52,000 profit, and probability 0.24 of breaking even (a profit of $0). What is the expected value of the profit? Would you advise the investor to make the investment?
Homework Answers
expected value of the profit=Respective return*Respective probability
=(0.39*-22,200)+(0.23*14900)+(0.14*52000)+(0.24*0)
=$2049
Hence since expected value of profit is less than $10,000;advisor should not make the investment
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An investor is considering a $10,000 investment in a start-up
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thank you so much for your help! have a great day and be safe <3 QUESTION...
thank you so much for your help!
have a great day and be safe <3
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thank you so much for your help!
have a great day and be safe <3
QUESTION 18 An investor is considering a $25,000 investment in a start-up company. She estimates that she has probability 0.2 of a $15,000 loss, probability 0.15 of a $20,000 loss, probability 0.05 of a $40,000 profit, and probability 0.6 of breaking even (a profit of $0). What is the expected value of the profit? $8,000 $1,667 $11,000 -$4,000 QUESTION 19 For the event described below,...
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