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Question

Suppose an investor is concerned about a business choice in which there are three prospects-the probability and returns are given below:

$\begin{array}{|cr|} \hline \text { PROBABILITY } & \text { RETURN } \\ \hline .4 & \$ 100 \\ \hline 3 & 30 \\ \hline 3 & -30 \\ \hline \end{array}$

What is the expected value of the uncertain investment? What is the variance?

Solution

VerifiedAnswered 10 months ago

Answered 10 months ago

Step 1

1 of 4In this problem, we must identify the expected value and the variance of a possible investment.

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