An investor is considering an investment in a start-up company. She estimates that she has probability 0.38 of a 11200 loss, probability 0.21 of a 8000 profit, probability 0.17 of a 37000 profit, and probability 0.24 of breaking even (a profit of $0). What is the expected value of the profit? Would you advise the investor to make the investment?

Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
Section: Chapter Questions
Problem 35T
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An investor is considering an investment in a start-up company. She estimates that she has probability 0.38 of a 11200 loss, probability 0.21 of a 8000 profit, probability 0.17 of a 37000 profit, and probability 0.24 of breaking even (a profit of $0). What is the expected value of the profit? Would you advise the investor to make the investment?   

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