document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=995610>Question 995610</A>: <I><SPAN STYLE=\"word-break: break-all;\"> A speculative investment is one in which there is a high risk of loss. If you invest $1000, you have a 40% chance of loosing all your money. However, you have an equal chance of the following events: breaking even (no gain or loss), gaining $2000, gaining $5000, or gaining $10000<BR>\n" );
document.write( "a) What is the expected value of the investment? (Make a table)<BR>\n" );
document.write( "b) Explain what the number means in this context. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #614320 by </B><A HREF=/tutors/aboutme.mpl?userid=Boreal><B>Boreal(15235)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Boreal><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Boreal><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=614320\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Expected value is the sum of the following:  Money made (+ or -) * probability<BR>\n" );
document.write( "1000*40%= -400<BR>\n" );
document.write( "0*15%=0<BR>\n" );
document.write( "2000*15%=300<BR>\n" );
document.write( "5000*15%=750<BR>\n" );
document.write( "10000*15%=1500<BR>\n" );
document.write( "The percentages add up to 100%, and the products add to +  $2150.<BR>\n" );
document.write( "====<BR>\n" );
document.write( "This means if one were able to invest $1000 over and over again, infinite times, the expected value of the amount invested would be $2150 on each $1000 invested. </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );