Question #246338
Your friend is asking you to invest in his bakery, and you have 35000. The returns are volatile, and you may get either 43000 with a probability of 0.44 or 27000 with a probability of 0.56.
1
Expert's answer
2021-10-05T11:21:01-0400
E(X)=(43000−35000)(0.44)E(X)=(43000-35000)(0.44)

+(27000−35000)(0.56)=−960+(27000-35000)(0.56)=-960

It is expected that you will lose 960.


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