document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1012633>Question 1012633</A>: <I><SPAN STYLE=\"word-break: break-all;\"> I have no clue where to begin with this problem:\r<BR>\n" );
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document.write( "An investment firm is considering two alternative investments, A and B, under two possible future sets of economic conditions good and poor. There is a .60 probability of good economic conditions occurring and a .40 probability of poor economic conditions occurring. The expected gains and<BR>\n" );
document.write( "losses under each economic type of conditions are shown in the following table:\r<BR>\n" );
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document.write( "Investment<BR>\n" );
document.write( "               Economic Conditions<BR>\n" );
document.write( "               Good         Poor<BR>\n" );
document.write( "   A           $380,000 -$100,000<BR>\n" );
document.write( "   B           $130,000 $85,000\r<BR>\n" );
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document.write( "Using the expected value of each investment alternative, determine which should be selected. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #628657 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=628657\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Expected values= Sum of X*p(x)<BR>\n" );
document.write( "A: The plus is 380000*.6-100000(.4)=228000-40000=$188,000<BR>\n" );
document.write( "B. 130000*0.6+85000(0.4)=78000+34000=$112,000<BR>\n" );
document.write( "A has a better expected value so mathematically it should be selected.   </SPAN>\n" );
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