document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1073252>Question 1073252</A>: <I><SPAN STYLE=\"word-break: break-all;\"> in the incoming year, the probability is 0.30 that the price of a certain house will go up 20%, the probability is 0.50 that the price will go up 10%, the probability is 0.10 that the price will remain the same, and the probability is 0.10 that the price will go down 10%. find the expected percentage increase.\r<BR>\n" );
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document.write( "answer please..... </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #688100 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><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=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=688100\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> .3 * 20% + .5 * 10% + .1 * 0% + .1 * -10% = 10%\r<BR>\n" );
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document.write( "the expected percentage increase is 10%.\r<BR>\n" );
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document.write( "you can also calculate the expected percent increase as follows:\r<BR>\n" );
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document.write( "assume the value of the investment is x.\r<BR>\n" );
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document.write( "30% of the time it will increase 20% to become 1.2 * x<BR>\n" );
document.write( "50% of the time it will increase 10% to become 1.1 * x<BR>\n" );
document.write( "10% of the time it will increase 0% to become 1.0 * x<BR>\n" );
document.write( "10% of the time it will decrease 10% to become .9 * x\r<BR>\n" );
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document.write( "expected value of the investment becomes:\r<BR>\n" );
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document.write( ".3 * (1.2 * x) + .5 * (1.1 * x) + .1 * (1.0 * x) + .1 * (.9 * x)\r<BR>\n" );
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document.write( "you will get expected value = 1.1 * x.\r<BR>\n" );
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document.write( "the percent increase in value is 1.1 * x / 1.0 * x = .1.\r<BR>\n" );
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document.write( "multiply that by 100 and it becomes 10%.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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