Question

INDUSTRIES IS CONSIDERING PURCHASING A CERTAIN STOCK. AFTER

CONSIDERABLE RESEARCH, THE BOARD MEMBERS DETERMINE THAT THERE IS A 60% CHANCE OF MAKING $8000, A 10% CHANCE OF BREAKING EVEN, AND A 30% CHANCE
OF LOSING $6200. FIND THE EXPECTATION OF THIS PURCHASE

Answer 1

0.6(8000) + 0.1(0) + 0.3(-6200)
4800 + 0 - 1860
$2140