SOLUTION: 3. An investor is considering purchasing a small business. He knows that in case of a good market the business will yield $95,000 of profit; in case of a poor market there will be

SOLUTION: 3. An investor is considering purchasing a small business. He knows that in case of a good market the business will yield $95,000 of profit; in case of a poor market there will be

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Question 848332: 3. An investor is considering purchasing a small business. He knows that in case of a good market the business will yield $95,000 of profit; in case of a poor market there will be a loss of $15,000. It is known that the probability of a good market for the next year is 0.4, and the probability of a poor market is 0.6.
Find the expected value of the profit.
Answer by swincher4391(1107) (Show Source): You can put this solution on YOUR website!
95000(0.4) - 15000(0.6) = + 29000

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