An investment counselor calls with a hot stock tip. He believes that if the economy remains strong, the investment will result in a profit of $50,000. If the economy grows at a moderate pace, the investment will result in a profit of $10,000. However, if the economy goes into recession, the investment will result in a loss of $50,000. You contact an economist who believes there is a 20% probability the economy will remain strong, a 70% probability the economy will grow at a moderate pace, and a 10% probability the economy will slip into recession. What is the expected profit from this investment? The expected profit is (Type an integer or a decimal.)
An investment counselor calls with a hot stock tip. He believes that if the economy remains strong, the investment will result in a profit of $50,000. If the economy grows at a moderate pace, the investment will result in a profit of $10,000. However, if the economy goes into recession, the investment will result in a loss of $50,000. You contact an economist who believes there is a 20% probability the economy will remain strong, a 70% probability the economy will grow at a moderate pace, and a 10% probability the economy will slip into recession. What is the expected profit from this investment? The expected profit is (Type an integer or a decimal.)
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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An investment counselor calls with a hot stock tip. He believes that if the economy remains strong, the investment will result in a profit of
probability the economy will remain strong, a
$50,000.
If the economy grows at a moderate pace, the investment will result in a profit of
$10,000.
However, if the economy goes into recession, the investment will result in a loss of
$50,000.
You contact an economist who believes there is a
20%
70%
probability the economy will grow at a moderate pace, and a
10%
probability the economy will slip into recession. What is the expected profit from this investment?The expected profit is
(Type an integer or a decimal.)Expert Solution
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