Expected Value of the Risky Investment Assignment | Homework For You
May 25th, 2020
Let us suppose you can put your money into a savings account and earn $500 in two years. Alternatively, you could put your money into a risky investment or into a more conservative investment. For the risky investment if the economy is good, will profit you $2000, but during a bad year, you would lose $500. For the conservative investment if the economy is good, will profit you $1000, but if the economy is bad, you will lose $300. Assume that the probability of a good year is 36%. What is the expected value of the risky investment? Get Finance homework help today

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