document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1206557>Question 1206557</A>: <I><SPAN STYLE=\"word-break: break-all;\"> A venture capitalist, willing to invest $1,000,000, has three investments to choose from. The first investment, a software company, has a 10% chance of returning $5,000,000 profit, a 30% chance of returning $1,000,000 profit, and a 60% chance of losing the million dollars. The second company, a hardware company, has a 20% chance of returning $3,000,000 profit, a 40% chance of returning $1,000,000 profit, and a 40% chance of losing the million dollars. The third company, a biotech firm, has a 10% chance of returning $6,000,000 profit, a 70% of no profit or loss, and a 20% chance of losing the million dollars.<BR>\n" );
document.write( "Construct a PDF for each investment.<BR>\n" );
document.write( "Software company:<BR>\n" );
document.write( "Hardware company:<BR>\n" );
document.write( "Biotech firm:<BR>\n" );
document.write( "Find the expected value for each investment.<BR>\n" );
document.write( "software company:$ <BR>\n" );
document.write( "hardware company:$   	<BR>\n" );
document.write( "biotech firm: $     </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #844118 by </B><A HREF=/tutors/aboutme.mpl?userid=ikleyn><B>ikleyn(52776)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=ikleyn><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=ikleyn><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=844118\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> .<BR>\n" );
document.write( "A venture capitalist, willing to invest $1,000,000, has three investments to choose from. \r<BR>\n" );
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document.write( "The first investment, a software company, has a 10% chance of returning $5,000,000 profit, <BR>\n" );
document.write( "a 30% chance of returning $1,000,000 profit, and a 60% chance of losing the million dollars. \r<BR>\n" );
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document.write( "The second company, a hardware company, has a 20% chance of returning $3,000,000 profit, <BR>\n" );
document.write( "a 40% chance of returning $1,000,000 profit, and a 40% chance of losing the million dollars. \r<BR>\n" );
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document.write( "The third company, a biotech firm, has a 10% chance of returning $6,000,000 profit, <BR>\n" );
document.write( "a 70% of no profit or loss, and a 20% chance of losing the million dollars.\r<BR>\n" );
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document.write( "(a) Construct a PDF for each investment.<BR>\n" );
document.write( "Software company:<BR>\n" );
document.write( "Hardware company:<BR>\n" );
document.write( "Biotech firm:<BR>\n" );
document.write( "(b) Find the expected value for each investment.<BR>\n" );
document.write( "software company:$<BR>\n" );
document.write( "hardware company:$<BR>\n" );
document.write( "biotech firm: $<BR>\n" );
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document.write( "&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Part (a) is super-simple. Everybody, who is able to write or to print,<BR>\n" );
document.write( "&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;can do it on his or her own without having any difficulties and without any help from outside.\r<BR>\n" );
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document.write( "&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I will focus on part (b) here.\r<BR>\n" );
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document.write( "<PRE STYLE=\"white-space: pre-wrap; white-space: -moz-pre-wrap; white-space: -pre-wrap; white-space: -o-pre-wrap; word-wrap: break-word;\">\r\n" );
document.write( "expected value, software company  E = 0.1*5000000 + 0.3*1000000 - 0.6*1000000 = 200,000 dollars.\r\n" );
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document.write( "expected value, hardware company  E = 0.2*3000000 + 0.4*1000000 - 0.4*1000000 = 600,000 dollars.\r\n" );
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document.write( "expected value, biotech  company  E = 0.1*6000000 + 0.7*0       - 0.2*2000000 = 200,000 dollars.\r\n" );
document.write( "</PRE>\r<BR>\n" );
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document.write( "Solved.\r<BR>\n" );
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document.write( "As you see, this task is EXTREMELY simple and straightforward.  <BR>\n" );
document.write( "There is nothing on the way that would puzzle your mind.\r<BR>\n" );
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document.write( " </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );