Answer: D. $3,450
Given: 2,500 shares of a stock bought for $8 a share
<span>Probabilities: the stock will rise to a value of $32 a share is 22%</span> <span> the stock will fall to $3 a share is 78%</span>
<span>Question: What is the expected value of the investor’s profit from buying the stock?</span>
Solution: (22%(32-8)-78%(8-3))2500
(.22(24)-.78(5))2500
(5.28-3.9)2500
(1.38)2500
3450
<span>6x^2 + 4x = 2x(3x + 2)
4x^2 + 11x + 6 = (4x + 3)(x + 2)
9x^2 - 4 = (3x +2)(3x - 2)</span>
9514 1404 393
Answer:
512 million
Step-by-step explanation:
Expected value is the sum of the products of probability and the value associated with that probability. Here, it is the sum ...
0.4(390) +0.4(890) +0.2(0) = 512 . . . million
The expected value of the loss over a 5-year period is $512 million.