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 ​$ 40 comma 40,000. If the economy grows at a moderate​pace, the investment will result in a profit of ​$ 10 comma 000 10,000. ​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.

grabrovi0u 2022-10-23 Answered
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 ​$ 40 comma 40,000. If the economy grows at a moderate​pace, the investment will result in a profit of ​$ 10 comma 000 10,000. ​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.
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Answers (1)

Spielgutq1
Answered 2022-10-24 Author has 17 answers
xpected profit from this
investment = 0.3 40000 0.6 10000 0.1 40000 = 14000 $
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