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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 ​$50,000. If the economy grows at a moderate​ pace, the investment will result in a profit of​$20,000. ​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 60​% probability the economy will grow at a moderate​ pace, and a 20​% probability the economy will slip into recession. What is the expected profit from this​ investment?

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​$20,000. ​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 60​% probability the economy will grow at a moderate​ pace, and a 20​% probability the economy will slip into recession. What is the expected profit from this​ investment?

College Algebra
College Algebra
10th Edition
ISBN:9781337282291
Author:Ron Larson
Publisher:Ron Larson
Chapter8: Sequences, Series,and Probability
Section: Chapter Questions
Problem 18T: You attend a karaoke night and hope to hear your favorite song. The karaoke song book has 300...
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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 ​$50,000. If the economy grows at a moderate​ pace, the investment will result in a profit of​$20,000. ​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 60​% probability the economy will grow at a moderate​ pace, and a 20​% probability the economy will slip into recession. What is the expected profit from this​ investment?

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