tKAn investment counselor calls with a hot stock tip. He believes that if the economy remains strong, the investment will result in a profit of $40,000. If the economy grows at a moderate pace, theinvestment will result in a profit of $20,000. However, if the economy goes into recession, the investment will result in a loss of $40,000. You contact an economist who believes there is a 30%probability the economy will remain strong, a 60% probability the economy will grow at a moderate pace, and a 10% probability the economy will slip into recession. What is the expected profit fromthis investment?The expected profit is $. (Type an integer or a decimal.)

Given: If the economy remains strong, the investment will result in a $40,000 profit with a…

Answered: K An investment counselor calls with a…

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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You have $69,000. You put 16% of your money in a stock with an expected return of 14%, 35,000 in a stock with an expected return of 15%, and the rest in a stock with expected of 21%. What is the expected return of your portfolio The expected return of your portfolio is
part c
A restaurant is planning to open in town. They estimate that there is a 50% probability that is will make $50,000, a 15% probability that it will break even, and a 35% probability that it will lose $28,000. Find the expected profit.
Dystopia county has three bridges. In the next year, the Elder bridge has a 11% chance of collapse, the Younger bridge has a 3% chance of collapse, and the Ancient bridge has a 17% chance of collapse. What is the probability that exactly one of these bridges will collapse in the next year? (Round your final answer to four decimal places. Do not round intermediate calculations.)
12
There is a 0.99965 probability that a randomly selected 29-year-old female lives through the year. An insurance company wants to offer her a one-year policy with a death benefit of $900,000. How much should the company charge for this policy if it wants an expected return of $400 from all similar policies? The company should charge $. (Round to the nearest dollar.)
part a only
An option to buy a stock is priced at $210. If the stock closes above 30 on May 15, the option will be worth $900. If it closes below 20, the option will be worth nothing, and if it closes between 20 and 30 (inclusively), the option will be worth $180. A trader thinks there is a 45% chance that the stock will close in the 20–30 range, a 25% chance that it will close above 30, and a 30% chance that it will fall below 20 on May 15. How much do they expect to gain? Should they buy the stock option? Explain.
Find the expected value of this investment scheme. Profit/Loss Amount Probability -$6200 0.08 -$150 0.66 $4500 0.02 $2000 0.24
SECTION 11.3: EXPECTED VALUE ONLINE VERSION 1. You play a game in which 30% of the time you will WIN $5 and 70% of the time you will LOSE $3. What is the expected value for this game? Please show your work.
You are deciding to launch your own jewelry line. After researching the market, you predict you have a 37% chance of earning $5,200, a 28% chance of breaking even, and a 35% chance of losing $3,800. Calculate the expected value. Is this a good investment? Explain.
A 38 -year-old woman purchases a $200,000 term life insurance policy for an annual payment of $370. Based on a period life table for the U.S. government, the probability that she will survive the year is 0.999052. Find the expected value of the policy for the insurance company. Round to two decimal places for currency problems.

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